Last updated: 16 April, 2012

Oil prices drop after Iran nuclear talks

Oil prices were mixed on Monday after weekend talks between Iran and world powers regarding the Islamic republic’s nuclear programme eased concerns over crude supplies according to analysts.

Brent North Sea crude for delivery in June slid $1.53 to stand at $119.68 in London afternoon deals.

“Oil has slipped after ‘constructive’ talks between Iran and six of the world’s biggest economic superpowers,” said IG Markets analysts Justin Harper.

“This has helped take some of the ‘war premium’ out of energy prices.”

New York’s main contract, West Texas Intermediate crude for May, rose 53 cents to $103.36 a barrel in the wake of robust US sales data, traders said.

Saturday’s nuclear talks between officials from Iran and diplomats from the so-called P5+1 group comprising the United States, Russia, China, Britain, France and Germany have largely been described as “positive” by both sides.

However Western officials have stressed that a great deal was expected of the Islamic republic at the next meeting in Baghdad on May 23.

“The weekend discussions between the P5+1 group and Iran suggest that Iran is being constructive enough to avoid any US/Israeli rush to judgement,” said PVM brokers analyst David Hufton.

“Sanctions and the threat of an Israeli strike may be achieving their aim.”

The weekend talks were aimed at persuading Tehran — the second-biggest producer of crude in OPEC — to halt its controversial nuclear programme, which much of the international community believes is geared towards building an atomic weapon.

Iran has so far insisted that it is enriching uranium for peaceful purposes including cancer treatment.

Several rounds of financial sanctions by the UN Security Council, the United States and the European Union have so far been ineffective in pressuring Iran to cease its nuclear activities.

The Islamic republic has previously threatened to shut the strategic Strait of Hormuz — a major passageway for a fifth of the world’s global oil supply — if it faced further sanctions.