Oil Falls Amid Optimism on Iran Nuclear Dispute
July 10 (Bloomberg) -- Crude oil fell for a third day in New York on signs a negotiated settlement may be possible over the nuclear research program in Iran, the world's fourth-largest oil producer.
Oil fell from a record $75.78 a barrel on July 7 after Iran's chief nuclear negotiator Ali Larijani said he had constructive talks with European officials on a package of incentives to stop the Islamic republic's uranium enrichment. Iran will formally respond to the proposals next month, Foreign Minister Manouchehr Mottaki told journalists yesterday.
``The kind words from the Iranians were quite important,' said Tobin Gorey, commodity analyst at Commonwealth Bank of Australia Ltd. in Sydney. Also, ``the premise for the push up through last week's high was modest,' he said.
Crude oil for August delivery fell as much as 53 cents, or 0.7 percent, to $73.56 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $73.70 at 7:53 a.m. in Singapore, 24 percent higher than a year ago.
The August contract fell 1.4 percent to $74.09 a barrel on July 7, the biggest one-day decline in more than three weeks. Crude oil reached a record earlier in the session after North Korea, which fired at least seven missiles last week said it would continue missile tests.
Prices eased the day before when the Energy Department's weekly inventory report showed U.S. gasoline stockpiles unexpectedly rose during peak summer motoring demand.
Temporary Risks
While North Korea's posturing had temporarily ``raised the risk temperature' in the oil market, the missile tests had merely proven the Asian nation's ``rogue-state credentials', Commonwealth's Gorey said.
Gasoline for August delivery fell 2.02 cents, or 0.9 percent, to $2.2192 a gallon in after-hours trading. The contract fell 0.9 percent to $2.2394 on July 7, following a 0.7 percent decline the day before.
The price of the motor-fuel fell late last week after the department's report showed U.S. gasoline inventories gained 727,000 barrels in the week ended June 30. Stockpiles rose even as demand reached 9.65 million barrels a day, the third-highest ever, the department said.
``The market is definitely reviewing how soft demand in the U.S. is,' Gorey said. ``Given what can still happen with this Iran situation, and given we're still in the hurricane season' oil prices may not fall much further, he said.
About 12 percent of U.S. oil production in the Gulf of Mexico remains shut because of damage from hurricanes Katrina and Rita last year, the U.S. Minerals Management Service said June 21. The Atlantic hurricane season runs from June 1 through November.
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