Oil futures fall ahead of meeting on Iran
NEW YORK – Easing supply fears and a technical selloff in unleaded gasoline futures helped push oil prices lower on Monday, though crude futures still hovered above $62 a barrel, or 16 percent higher than a year ago.Some calm was brought to the world’s jittery energy markets amid expectations that Iran’s oil output won’t be affected by the U.N. nuclear watchdog’s meeting later in the day on Tehran’s nuclear ambitions. Also Monday, oil ministers suggested that the Organization of Petroleum Exporting Countries will keep output levels intact at its meeting later this week.Light sweet crude for April delivery fell $1.26 to settle at $62.41 a barrel on the New York Mercantile Exchange.The decline in crude was also tied to a technical selloff in Nymex gasoline futures, which fell 8.71 cents to close at $1.656 a gallon.Energy futures brokers said the dropoff in gasoline was tied to an announcement Friday by the Dow Jones-AIG Commodity Index, which next month will stop trading the New York Harbor Unleaded Gasoline contract. Instead, the index will use the gasoline futures contract known as the reformulated gasoline blendstock for oxygen blending, or RBOB.The move stems from the refining industry’s decision to introduce ethanol as a substitute for methyl tertiary butyl ether, or MTBE, in summer blends of gasoline.”More of the business is going to the RBOB because the Nymex unleaded gasoline contract is still reformulated with MTBE,” said oil broker Tom Bentz of BNP Paribas Commodity Futures in New York.Heating oil futures dipped 5.51 cents to finish at $1.7577 a gallon.Natural gas declined 24.3 cents to $6.547 per 1,000 cubic feet.The International Atomic Energy Agency began a board meeting Monday on Iran, the No. 2 oil producer in OPEC. The board’s recommendation to the U.N. Security Council, which has the power to impose sanctions, will likely help determine its immediate course of action.The head of the U.N. nuclear watchdog agency, Mohamed ElBaradei, said as the meeting opened Monday that he is “hopeful that in the next week an agreement could be reached,” alluding to talks between Moscow and Tehran aimed at moving Iran’s enrichment program to Russia and possible further contacts between Iran and Europe.The International Atomic Energy Agency’s 35-member board was not likely to discuss the Iran issue until Tuesday or Wednesday. But delegates said that whatever step the council might take, if any, it would stop far short of sanctions.Diplomats told the AP that recent talks have touched on the possibility of allowing Tehran to run a scaled-down uranium enrichment program.Iran has insisted it wants uranium enrichment only to generate electricity, not for nuclear arms, but the United States and its allies have argued that this is not the case.The Organization of Petroleum Exporting Countries meets Wednesday, but ministers from key member nations are signalling that the cartel is unlikely to trim its overall output.Kuwait wants the 11-nation cartel to maintain its current production ceiling of 28 million barrels a day “just to help the prices be more stable,” Sheik Ahmed said in Kuwait City before Wednesday’s OPEC meeting in Vienna. He said he believes oil prices will drop this spring, barring a rise of “tension and geopolitical problems.”On Sunday, militants threatened more attacks on oil facilities in Nigeria, Africa’s largest producer of crude oil, and vowed to cut daily oil exports by 1 million barrels.In attacks on Nigerian pipelines and oil facilities, the Movement for the Emancipation of the Niger Delta has reduced the country’s production by 455,000 barrels a day. Nigeria normally exports 2.5 million barrels daily.