Oil falls below $107 on Iran nuclear deal

by **Cals** Mon 13 Jan 2014, 22:12

Oil falls below $107 on Iran nuclear deal
Business & Markets 2014
Written by Reuters
Monday, 13 January 2014 19:37

LONDON (Jan 13): Oil fell below $107 a barrel on Monday after six major powers struck a fresh six-month deal with Iran to curb its nuclear programme.

Brent crude for February delivery was down 59 cents at $106.66 per barrel at 1047 GMT. The contract had settled 86 cents higher on Friday. U.S. crude slipped 62 cents to $92.10 per barrel, after closing $1.06 higher on Friday.

Analysts said the move lower on the Iran developments was relatively muted because any increase in exports would be slow.

"It adds some bearish sentiment, but there won't be a big increase in exports this year, and this is only the signing of an intermediate deal," said Bjarne Schieldrop, analyst at SEB in Oslo.

The deal between Iran and six major powers intended to pave the way to a solution to a long standoff over Tehran's nuclear ambitions will come into force on Jan. 20, the Iranian Foreign Ministry and the European Union said on Sunday.

Sanctions against Iran over its nuclear programme have kept about 1 million barrels per day of oil off global markets, but an agreement reached Nov. 24 last year raised hopes of a long-term deal that could see Iran resuming full exports.

U.S. President Barack Obama urged the Congress not to impose additional sanctions on Iran, saying that doing so risked undermining the November agreement, which aims to give the two sides six months to reach a comprehensive deal.

Buzzard watch

Brent oil extended losses after industy sources said the North Sea's Buzzard oilfield was ramping back up to its full production rate on Monday after production problems last week. Operator Nexen declined to comment.

Buzzard is the largest of the fields that contribute to the Forties crude blend, the most important of the North Sea crudes underpinning the Brent crude benchmark.

Crude oil prices could soften by mid-2014 due to some weakness in demand, Nizar Al-Adsani, chief executive of state-owned Kuwait Petroleum Corp (KPC), told reporters on Monday.

By contrast, fellow OPEC member Iran was more upbeat about the outlook for prices. Iranian oil minister Bijan Zanganeh told his ministry's news service Shana that crude oil prices are not likely to change dramatically this year.