Sun, Apr 05, 2015 - Page 15 News List

Oil prices slide on hopes of Iranian nuclear deal

VOLATILITY:Brent crude tumbled more than US$2 on Thursday, while investors sought safety in gold on the back of weak jobs data and fears of a Greek default

AFP, LONDON

World oil prices sank this week as traders eyed a possible Iran nuclear energy deal that could ease sanctions on the crude producer and potentially add to global oversupply.

In late Thursday afternoon deals, Brent crude tumbled more than US$2, as global powers battling to seal a deal with Iran over its nuclear program called a press event, raising hopes for a breakthrough.

Elsewhere, other global commodity markets diverged in a holiday-shortened week with many traders away for an extended Easter holiday break.

OIL: Crude futures fell heavily amid ongoing Iran nuclear talks, with the market also weighed down by plentiful petroleum supplies.

“The oil market continues to wait for the outcome of the nuclear negotiations with Iran,” Commerzbank analyst Carsten Fritsch said. “An agreement in the nuclear dispute would doubtless put further pressure on prices in the short term, even though sanctions will probably be eased only gradually.”

Weary negotiators in Lausanne, Switzerland, on Thursday hoped to see the light at the end of the tunnel after talking until dawn, but midway through an eighth day were still haggling over the outlines of a deal curtailing Iran’s nuclear program.

US Secretary of State John Kerry and Iranian Minister of Foreign Affairs Mohammad Javad Zarif talked through the night, going line by line over their differences in a bid to agree a framework for an accord to cut back Iran’s nuclear ambitions, diplomats close to the talks said.

They made “significant progress,” but there is no “final result yet,” Zarif told reporters early on Thursday at the Swiss hotel hosting the negotiations, saying he felt “lucky” to have slept for two hours.

Russian Minister of Foreign Affairs Sergei Lavrov on Thursday said that global powers and Iran were “only steps” from a negotiated deal aimed at cutting back Tehran’s nuclear program.

After 18 months of intense negotiations, the six world powers and Iran are hoping to agree a deal that puts a lid on 12 years of dangerously rising tensions.

The aim is to turn the framework they want to leave Lausanne with into a comprehensive accord backed by specific technical commitments by June 30, when an interim deal struck in November 2013 expires.

With the world’s fourth-biggest oil and second biggest gas reserves, the energy industry is the cornerstone of Iran’s economy, but it has been hit hard by the US and European embargo imposed since 2012.

Oil has collapsed by as much as 60 percent in value since June last year on the back of a burgeoning supply glut.

Prices had rallied the previous week as Saudi Arabian jets struck rebel targets in Yemen, sparking supply fears in the crude-rich Middle East.

By Thursday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month plunged to US$54.80 per barrel from US$57.81 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for May slid to US$49.29 compared with US$50.16 a week earlier.

PRECIOUS METALS: Gold climbed as investors sought the safety of the precious metal.

“Gold prices rallied this week on the back of weak employment data and rising geopolitical tensions,” Natixis analyst Bernard Dahdah said. “In addition to the stalemate between the P5+1 and Iran in Lausanne, rumors circulated that Greece might be unable to meet its scheduled IMF repayment on April 9.”

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