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Crude rises on technical buying, Iran nuclear talks

Published 05/23/2012, 09:16 PM
Updated 05/23/2012, 09:17 PM
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Investing.com - Crude oil futures rose in Asian trading on Thursday, rebounding after touching technical support levels earlier.

The  market also followed talks among U.N. Security Council countries plus Germany with Iran over the latter's nuclear ambitions.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at USD90.58 a barrel, up 0.75%, off from a session high of USD90.64 and up from an earlier session low of USD90.27.

Oil futures, which dipped below USD90.00 in U.S. trading, have plunged on fears Greece will exit the eurozone and slow the European economy, which would crimp the continent's energy demand.

However, prices rebounded amid technical buying in early Asian trading on sentiment the commodity has fallen enough.

Meanwhile in Iraq, delegates from the U.S., U.K., China, France, and Russia and Germany are holding talks with Iranian officials to diffuse a standoff involving Iran's nuclear plans.

Hopes that Iran will allow inspectors from the United Nations nuclear watchdog, the International Atomic Energy Agency, to visit its facilities sent crude falling in recent sessions as well, although the market grew a little edgy on Thursday once bilateral meetings began.

Oil shot up earlier this year amid growing tensions between the West and Iran, with the former accusing the latter of developing a nuclear weapons program, a charge Tehran denies.

Tensions simmered to the point earlier this year that Iran threatened to close the Strait of Hormuz, a narrow waterway connecting oil-rich Persian Gulf nations with the rest of the world.

Iran cut oil exports to portions of Europe to counter economic sanctions slapped on the country, and a European Union-wide oil embargo still remains set to take effect in July.

Since both sides agreed to sit down for talks, prices have cooled.

The U.S. Energy Information Administration, meanwhile, said in its weekly report that U.S. crude oil inventories rose by 883,000 barrels in the week ended May 18, slightly below market expectations for around 950,000-barrel increase.

U.S. crude supplies rose by 2.13 million barrels in the preceding week.

Total crude oil stockpiles stood at 382.5 million barrels as of last week, the highest level since August 1990, suggesting oil demand is falling in the U.S., although the market shrugged off the data in Asian trading.

On the ICE Futures Exchange, Brent oil futures for July delivery were up 0.39% and trading at USD106.47 a barrel, up USD15.89 from its U.S. counterpart.







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