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Oil prices flat in Asian trade but Iran worries remain
AFP
SINGAPORE
Petroleumworld.com 07 12 06
Oil prices were flat in Asian trade Wednesday but were supported by continued supply concerns and heightened tensions between Iran and the West over Tehran's nuclear program, dealers said.
At 2:35 pm (0635 GMT), New York's main contract, light sweet crude for delivery in August, was at 74.16 dollars a barrel, unchanged from late US trade.
Brent North Sea crude for August was down seven cents at 73.60 dollars.
"The Iran situation is certainly an on-going issue ... and it won't be reducing its fear premium in the market anytime soon," said Mark Pervan, an analyst with Melbourne-based Daiwa Securities.
"The dispute will be very much protracted," he added.
The UN Security Council's five permanent members plus Germany were to meet in Paris on Wednesday to try to forge a united front in the international stand-off over Iran's nuclear programme.
The meeting comes a day after talks between European Union foreign policy envoy Javier Solana and Iran's top nuclear negotiator, which EU officials described as disappointing.
World powers are seeking a rapid response from Iran on a package of economic and political incentives designed to persuade it to freeze uranium enrichment -- a process needed to fuel a nuclear reactor but which could also be used to make a bomb.
Washington has repeatedly warned that Iran would be exposing itself to Security Council action if it rejects the offer.
Though pressed to give a response before a meeting of the Group of Eight major industrialised countries in Russia this weekend, Iran has repeatedly said it would not answer before August.
Analysts warn that Iran, the world's fourth-biggest oil producer, could disrupt exports if hit by economic sanctions.
"By refusing the European Union's proposals, Iran's president has sent a clear hawkish signal to the market," Societe Generale analyst Alexandre Kervinio said.
On Friday, oil hit a record 75.78 dollars in New York trade owing to renewed tensions over Iran and North Korea, which tested a series of missiles last week.
Dealers said the market is now looking ahead to the weekly US Department of Energy inventory report to be released later Wednesday.
"The market will be closely watching the stock inventories. It is particulary concerned about gasoline (petrol) inventories," Pervan said.
"It is probably expecting a small fall for gasoline. If we see a larger than expected drop, then prices would increase."
AFP 12 0644 GMT 07 06
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