Oil prices advance on Iran talks impasse

21st November 2013, Comments 0 comments

Oil prices rallied Thursday in the absence of a deal over Iran's nuclear programme, as markets also assessed the outlook for Federal Reserve stimulus and reacted to weaker Chinese data.

New York's main contract, West Texas Intermediate (WTI) for delivery in January, jumped $1.46 to $95.31 a barrel.

Brent North Sea crude for January advanced by $1.16 to stand at $109.22 a barrel in late London deals.

A senior negotiator for Iran played down the prospect of reaching an agreement with world powers on Thursday on its controversial nuclear programme, Iranian media reported.

"I do not think the negotiations will reach a conclusion tonight," Abbas Araqchi, a deputy foreign minister, was quoted as saying by the Mehr news agency after a session with the P5+1 group of world powers.

The talks, the third since President Hassan Rouhani took office, are aimed at getting major crude exporter Iran to scale back some of its nuclear programme in exchange for minor sanctions relief.

"Further delays in a resolution or the imposition of additional sanctions could provide the foundation for a move higher in the coming sessions," Sucden brokers analyst Kash Kamal said on Thursday.

The P5+1 group of Britain, China, France, Russia and the United States plus Germany wants Iran to suspend certain parts of its nuclear energy programme, which the West suspects to be a cover for weapons development. Iran denies the accusation.

The two sides resumed talks late on Wednesday aimed at reaching a landmark deal although Tehran's supreme leader Ayatollah Ali Khamenei has vowed not to retreat "one step".

The US Senate will meanwhile move to impose new sanctions on Iran in December should the negotiations fail to bear fruit, Senate Majority Leader Harry Reid announced Thursday.

Oil traders were reacting also to minutes of the last Federal Reserve meeting, which showed the US central bank has considered the possibility of tapering its huge stimulus programme in the coming months.

The minutes were published on Wednesday and after the Department of Energy said US commercial crude inventories had risen 400,000 barrels last week -- lower than market expectations of a gain of 700,000 barrels.

The United States is the world's biggest consumer of crude. In China, the largest user of energy, manufacturing data has slowed in November according to data published on Thursday.

HSBC bank said its preliminary purchasing managers' index of manufacturing came in at 50.4, down from a final reading of 50.9 in October, which was a seven-month high.

The figures -- the result of weaker export orders -- threw a cloud over prospects for the Chinese economy. A reading above 50 indicates growth, while anything below signals contraction.

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© 2013 AFP

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