Oil futures rebound on stalled Iran talks, China data
By William L. Watts, MarketWatch
NEW YORK (MarketWatch) — Oil futures ended higher on Monday, with Brent crude rebounding from a four-month low after talks aimed at curbing Iran’s nuclear program in return for eased sanctions against the oil producer stalled.
December crude futures /quotes/zigman/2237079/realtime CLZ3 -0.42% erased an earlier loss to close at $95.14 a barrel, posting a gain of 54 cents on the New York Mercantile Exchange.
December Brent crude /quotes/zigman/2666546/realtime UK:LCOZ3 +0.39% outpaced Nymex futures, rebounding $1.28, or 1.2%, to $106.40 a barrel on ICE Futures.
Click to Play Kerry discusses next steps after Iran talks falterU.S. Secretary of State John Kerry, speaking Sunday on "Meet the Press," said global powers negotiating with Iran over a nuclear deal are looking for an agreement that leads to the successful halting of Tehran's nuclear ambitions. Photo: AP.
“After the correction of the last few weeks, negative sentiment looks overextended,” wrote strategists at Credit Suisse. “The latest U.S. oil demand numbers are robust and we think downside risks from current levels are contained.”
Brent futures temporarily trimmed gains earlier in the day after news reports, citing Iranian state television, said the country had agreed to a deal with the United Nations’ chief nuclear inspector that would give International Atomic Energy Agency inspectors wider access to the country’s nuclear sites, including a planned reactor that would be capable of producing more plutonium byproduct than conventional reactors. But the weakness was short-lived, and the Brent contract subsequently pressed to a new intraday high.
Brent futures had fallen to a four-month low on Friday amid anticipation over the Iran talks.
But the negotiations, aimed at completing a first-stage agreement to curb Iran’s nuclear program, stalled over the weekend. Talks are set to resume at a later date, and analysts said the agreement on wider inspections could help re-energize the negotiations.
Iran’s oil production fell about 17% in 2012 from 2011, according to the U.S. Energy Information Administration, with sanctions by the U.S., United Nations, European Union and others taking a toll. See: Why Iran matters a little less to oil markets.
Reuters Enlarge Image
U.S. Secretary of State John Kerry.
Still, Iran was the sixth-largest OPEC producer in October, with output estimated at around 2.6 million barrels a day, according to Bloomberg.
Analysts said oil futures were also underpinned by Chinese data over the weekend that showed industrial output rose 10.3% year-over-year in October, topping the median forecast for a 10% rise.
On top of that, the U.S. currency was weaker on Monday, with the dollar index /quotes/zigman/1652083/realtime DXY +0.29% , a measure of the U.S. unit against a basket of six major rivals, slipping as the euro maintained its footing. A weaker dollar can provide some support for commodities priced in the currency, as it makes the product cheaper for buyers using other currencies.
December gasoline futures /quotes/zigman/2776245/realtime RBZ3 +0.17% rose 5 cents to settle at $2.60 a gallon. January natural gas futures /quotes/zigman/2294299/realtime NGF14 +0.88% ended unchanged at $3.62 per million British thermal units.
By William L. Watts, MarketWatch
NEW YORK (MarketWatch) — Oil futures ended higher on Monday, with Brent crude rebounding from a four-month low after talks aimed at curbing Iran’s nuclear program in return for eased sanctions against the oil producer stalled.
December crude futures /quotes/zigman/2237079/realtime CLZ3 -0.42% erased an earlier loss to close at $95.14 a barrel, posting a gain of 54 cents on the New York Mercantile Exchange.
December Brent crude /quotes/zigman/2666546/realtime UK:LCOZ3 +0.39% outpaced Nymex futures, rebounding $1.28, or 1.2%, to $106.40 a barrel on ICE Futures.
Click to Play Kerry discusses next steps after Iran talks falterU.S. Secretary of State John Kerry, speaking Sunday on "Meet the Press," said global powers negotiating with Iran over a nuclear deal are looking for an agreement that leads to the successful halting of Tehran's nuclear ambitions. Photo: AP.
“After the correction of the last few weeks, negative sentiment looks overextended,” wrote strategists at Credit Suisse. “The latest U.S. oil demand numbers are robust and we think downside risks from current levels are contained.”
Brent futures temporarily trimmed gains earlier in the day after news reports, citing Iranian state television, said the country had agreed to a deal with the United Nations’ chief nuclear inspector that would give International Atomic Energy Agency inspectors wider access to the country’s nuclear sites, including a planned reactor that would be capable of producing more plutonium byproduct than conventional reactors. But the weakness was short-lived, and the Brent contract subsequently pressed to a new intraday high.
Brent futures had fallen to a four-month low on Friday amid anticipation over the Iran talks.
But the negotiations, aimed at completing a first-stage agreement to curb Iran’s nuclear program, stalled over the weekend. Talks are set to resume at a later date, and analysts said the agreement on wider inspections could help re-energize the negotiations.
Iran’s oil production fell about 17% in 2012 from 2011, according to the U.S. Energy Information Administration, with sanctions by the U.S., United Nations, European Union and others taking a toll. See: Why Iran matters a little less to oil markets.
Reuters Enlarge Image
U.S. Secretary of State John Kerry.
Still, Iran was the sixth-largest OPEC producer in October, with output estimated at around 2.6 million barrels a day, according to Bloomberg.
Analysts said oil futures were also underpinned by Chinese data over the weekend that showed industrial output rose 10.3% year-over-year in October, topping the median forecast for a 10% rise.
On top of that, the U.S. currency was weaker on Monday, with the dollar index /quotes/zigman/1652083/realtime DXY +0.29% , a measure of the U.S. unit against a basket of six major rivals, slipping as the euro maintained its footing. A weaker dollar can provide some support for commodities priced in the currency, as it makes the product cheaper for buyers using other currencies.
December gasoline futures /quotes/zigman/2776245/realtime RBZ3 +0.17% rose 5 cents to settle at $2.60 a gallon. January natural gas futures /quotes/zigman/2294299/realtime NGF14 +0.88% ended unchanged at $3.62 per million British thermal units.
