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Oil prices climb as traders track Iran news
AFP
LONDON
Petroleumworld.com 06 02 06
World oil prices rose on Friday as the market focus remained with major crude producer Iran.
Dealers were also absorbing an announcement from the Organisation of Petroleum Exporting Countries (OPEC) that it would maintain oil output at 28 million barrels per day.
New York's main contract, light sweet crude for delivery in July, added 46 cents to 70.80 dollars per barrel in electronic deals before the official opening of the US market.
In London, Brent North Sea crude for July delivery advanced 39 cents to 69.78 dollars per barrel in electronic trading.
Crude futures has shed around one dollar on Thursday after data from the US Department of Energy showed a rise in US energy reserves.
Six world powers agreed on Thursday on a incentive package of benefits if Iran suspended its nuclear fuel work, which has raised fears of weapons development, but threatened penalties if Tehran refuses to comply.
The meeting of foreign ministers from Britain, Russia, China, France, Germany and the United States was held on Thursday in Vienna.
Market expectations are that Iran will reject the package, paving the way for possible UN sanctions over its disputed nuclear energy ambitions.
"I don't think Iran will accept the incentive package; they are not driven by economic concerns," said Daruisz Kowalczyk a Hong Kong-based investment strategist with CFC Seymour.
"(The West) can't bargain on economic terms, it's not what they respond to, I don't think the new package will accomplish its objective," he said, adding that the likely rejection would make the possibility of military action or UN sanctions very real.
Analysts fear that Iran -- the world's fourth largest producer of crude and the second-biggest member of OPEC -- might cut oil exports in retaliation.
OPEC ministers, meeting in the Venezuelan capital of Caracas, agreed late Thursday to keep oil output at a 25-year high -- but said they would watch out for any signs of a global slowdown that might merit a cut in the months ahead.
AFP 020900 GMT 06 06
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