Oil prices climb on geopolitical factors

13th November 2013, Comments 0 comments

Global oil prices rebounded on Wednesday over concerns about supply factors in Iran and Libya, dealers said.

Brent North Sea crude for December jumped $1.22 to $107.03 a barrel in midday London deals.

New York's main contract, West Texas Intermediate (WTI) for delivery in December, rose 12 cents to $93.16 a barrel.

"Brent has firmed above $107, rebounding from the losses (Tuesday) caused by the Fed's stimulus withdrawal speculation," said analyst Lucy Sidebotham at British-based energy consultancy Inenco.

"The ongoing talks with Iran over the Tehran nuclear dispute have also pushed prices higher with no resolution in sight, which (a solution)would return the million barrels per day from Iran when sanctions are lifted.

"Concerns also continue in Libya as protesters block the Zawiya refinery gates and oil port yesterday, with the protestors having already taken over the eastern oil ports, cutting supply."

Investors are keeping an eye on the West's attempts to forge a nuclear deal with Iran that could lead to a lifting of sanctions and release more of its oil into the global marketplace.

The US, one of the six major powers negotiating with Iran, warned on Tuesday that fresh sanctions on the Islamic republic proposed by key lawmakers could derail the diplomatic effort and risk war.

The remarks marked a significant toughening of President Barack Obama's stance towards Congress on sanctions as Washington prepares to resume high-stakes nuclear diplomacy with Iran later this month.

The US president has vowed he will not allow Tehran's leaders to develop an atomic weapon, but last week's negotiations in Geneva between Iran and six world powers failed to reach an interim deal to halt its program.

Fresh from the talks, Secretary of State John Kerry heads to Capitol Hill on Wednesday to make the case for continued diplomacy.

Crude futures sank Tuesday, with WTI striking a five-month low on speculation that the US Federal Reserve could shortly begin withdrawing its economic stimulus.

The market was hit also by expectations that the US government's Department of Energy will report another weekly rise in stockpiles, when it publishes its latest inventories update on Thursday.

Prices also sank after the International Energy Agency forecast the United States would become the world's top oil producer by 2015 thanks to booming shale oil output.

In its annual World Energy Outlook report released Tuesday, the EIA also said the US, currently the world's top crude consumer, is moving "steadily towards meeting all of its energy needs from domestic resources by 2035".

© 2013 AFP

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