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Oil prices fall after US inventory report
By Antoine Agasse
AFP
NEW YORK
Petroleumworld.com 06 02 06Crude oil futures fell Thursday after data showed a rise in US fuel stockpiles and OPEC appeared set to maintain its production targets.
Futures also were impacted by falling commodity prices overall and a firmer dollar, analysts said.
New York's main contract, light sweet crude for delivery in July, fell 95 cents to finish at 70.34 dollars per barrel.
In London, Brent North Sea crude for July delivery dropped 1.02 dollars to 69.39 dollars per barrel in closing deals.
John Kilduff at Fimat USA said the market was pressured by "a selloff in global commodity markets, along with some renewed strength in the dollar."
The US Department of Energy said reserves of gasoline (petrol), which are in focus at the start of the summer driving season, rose by 800,000 barrels to 209.3 million in the week ending May 26. The figure was below the predicted increase of 1.4 million barrels.
But crude oil reserves increased 1.6 million barrels to 345.5 million in the week. Analysts had expected a gain of about one million barrels.
Kilduff said the report overall was "bearish" for the market since it showed higher reserves of crude oil.
He noted however, "The Iran worries are still in the market. People continue to be somewhat hopeful for a diplomatic solution."
Crude futures had fallen heavily on Wednesday after the United States offered to hold direct talks with Iran -- for the first time since 1979 -- over the Islamic republic's disputed nuclear program.
"The US offer to speak to Iran is progress (but) I think you have to wonder if the US was being cynical in making this offer. Surely they understood Iran wouldn't entertain it," said Societe Generale analyst Deborah White.
Iran has since rejected the US conditions for talks, prompting a warning from Washington that it would seek UN action if Tehran formally refuses to freeze sensitive nuclear work.
The West is concerned that Iran could be working on a clandestine nuclear weapons program under the cover of a civilian drive for atomic power. Iran denies this and says its nuclear program is solely for peaceful purposes.
The market in turn is concerned that Tehran may slash oil exports if hit by UN sanctions.
Iran is the world's fourth-biggest producer of crude and the second-largest OPEC player after kingpin Saudi Arabia
Prices also were dampened by expectations that ministers of the Organization of Petroleum Exporting Countries, meeting in the Venezuelan capital Caracas on Thursday, would hold the oil cartel's official production quota at 28 million barrels per day.
AFP 01 1927 GMT 06 06
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