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Oil Down As Iran Delays Votes On Oil Exports To EU

Oil Down As Iran Delays Votes On Oil Exports To EU
dj
Δευ, 30 Ιανουαρίου 2012 - 19:06
Crude oil futures were lower Monday as Iran postponed a decision over the weekend to halt oil exports to the European Union, taking some of the immediate risk of a supply disruption out of the market.
Crude oil futures were lower Monday as Iran postponed a decision over the weekend to halt oil exports to the European Union, taking some of the immediate risk of a supply disruption out of the market.

At 1245 GMT, the front-month March contract on the New York Mercantile Exchange was trading down 60 cents or 0.6%, at $98.96 a barrel. The front-month March Brent contract on London 's ICE futures exchange was down 21 cents, or 0.2%, at $111.25 a barrel.

Iran 's decision to delay the vote on its oil exports to the EU comes as United Nations nuclear inspectors are allowed back into the country, raising hopes of a resolution in the escalating crisis between the west and the Islamic Republic.

And with Libya now pumping around 1.3 million barrels a day, not far off its pre-war levels of 1.6 million barrels a day, supply worries aren't so much in the spotlight for the moment, analysts said.

Indeed it is now demand worries that are starting to dominate sentiment, as Friday's slightly weaker-than-expected U.S. gross domestic product data weighed on prices and as the Greek sovereign debt crisis lumbers on with no clear end in sight.

"This [ U.S. ] GDP report should be seen as a first warning sign," said JBC Energy in a note. "The downside risks are clearly back on the table and it is obvious why the Fed has extended its zero interest rate policy before economic figures take a turn for the worse."

Increasing jitters about Greece's sovereign debt woes spreading to Portugal and Italy, as yet another EU summit on the crisis takes place in Brussels Monday, are only adding to worries about future oil demand in the region, said analysts.

"In the short term [oil] supplies are adequate, it is the demand side that is uncertain," said VTB Capital's vice president of commodities research Andrey Kryuchenkov. "Should Greece default in March there will be repercussions for the euro and financial markets and eventually that will filter through to oil demand."

The euro fell against the dollar in line with weaker European stock markets and soaring Portugal government bond yields, adding to investor concerns that Greece still hasn't secured a deal with its private creditors on restructuring its debt amid growing worries that Greece 's funding needs might be bigger than originally thought.

The stronger dollar against the euro typically weakens oil prices as it makes the commodity more expensive to purchase for holders of other currencies.

At 1250 GMT, the ICE's gasoil contract for February delivery was up $3.50, or 0.4%, at $957.25 a metric ton, while Nymex gasoline for February delivery was down 378 points, or 1.3%, at $2.8890 a gallon.
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