Reuters: Oil was steady on Friday under $68 as easing fears over Iran’s nuclear program were countered by a slew of refinery outages in the United States that have thinned gasoline stocks. By Luke Pachymuthu
SINGAPORE (Reuters) – Oil was steady on Friday under $68 as easing fears over Iran’s nuclear program were countered by a slew of refinery outages in the United States that have thinned gasoline stocks.
London Brent crude, currently seen as more representative of global oil prices, was up 3 cents at $67.68 a barrel, while U.S. crude rose 7 cents to $65.13 at 0724 GMT.
Prices came under pressure in the previous session after Iran’s chief nuclear negotiator Ali Larijani said Tehran was closer to breaking an international impasse over its nuclear program.
European Union foreign policy chief Javier Solano said on Thursday, that talks with Larijani had been constructive and conducted in a good atmosphere, though no “great breakthrough” was on the cards for now.
“Certainly the improvement of the Iran situation is one of the factors that has helped put some pressure on oil,” said Tetsu Emori, chief strategist at Mitsui Bussan Futures Ltd.
Analysts remained cautiously optimistic that the face-off between Iran and the West, which suspects Tehran has a secret nuclear arms program, would not result in a supply halt from OPEC’s second-largest producer.
“I’m not focusing on Iran because they can’t stop their exports, they need the money,” Emori said.
Global oil consumers have long feared that Iran would use oil as a weapon in its stand-off with the West.
HEALTHY CRUDE, LOW GASOLINE STOCKS
Analysts said healthy crude inventories in the United States amid rising imports were dragging down oil prices.
“There is more than enough crude supply around to meet demand at the moment,” Emori said.
Crude stocks rose by 2.1 million barrels last week, U.S. government data showed on Wednesday, while imports rose by 116,000 barrels per day (bpd) to 10.04 million bpd.
But refinery utilization dropped by 2.6 percentage points last week, following a string of unplanned shutdowns that helped draw down gasoline stocks by 15 percent below early-February levels, government data showed.
Concerns over a supply crunch ahead of the summer driving season in the U.S. continue to limit a further slide.
Oil prices briefly moved up on Thursday, after a fire at Marathon Oil’s Garyville, Louisiana refinery.
Prices have also been supported this week by concerns over potential violence in OPEC-producer Nigeria, following elections at the weekend which observers said were manipulated. The opposition will join unions for peaceful protests on May Day.
Nigeria has lost 600,000 bpd of output over the past year.
