Oil, gasoline futures fall sharply as Iran concerns ease | VailDaily.com

Oil, gasoline futures fall sharply as Iran concerns ease

Oil futures prices fell sharply on Monday as concerns over Iran’s nuclear ambitions eased with an announcement by the Islamic republic and Russia that they would establish a joint uranium enrichment venture.Also, Saudi security forces shot and killed five militants the government said Monday were suspects in Friday’s foiled suicide bombing of a huge oil processing complex in the kingdom’s east.Still, analysts suggested that – although markets were well supplied – the potential for political instability or violence in key producing nations was limiting the price decline.Light sweet crude for April delivery on the New York Mercantile Exchange fell $1.91 to $61 a barrel. April Brent crude futures on London’s ICE Futures exchange fell $1.20 to $61.40 a barrel.Gasoline futures slid by 2.56 cents to $1.525 a gallon, while heating oil futures fell by 4.41 cents to $1.6826 a gallon. Natural gas futures declined 52.4 cents to $6.789 per 1,000 cubic feet, pushed lower by short-term forecasts in the U.S. calling for milder temperatures.On Sunday, Iran and Russia agreed in principle to establish a joint uranium enrichment venture, a breakthrough in talks on a U.S.-backed Kremlin proposal aimed at easing concerns that Tehran wants to build nuclear weapons. However, Russian Foreign Minister Sergey Lavrov said the Kremlin proposal to set up a joint uranium enrichment facility on Russian soil was contingent on Iran ending its own enrichment activities – something Tehran has so far refused to do.Further negotiations on the details lay ahead.Iran is OPEC’s No. 2 oil producer behind Saudi Arabia, and worries that a nuclear standoff could affect Iran’s oil output has lifted crude prices in recent weeks.”You have to believe at this point that the new Iranian president is willing to use oil as a weapon, if only for a symbolic week or two to create a crisis, exact some concessions from the West and then defuse the situation,” said oil analyst John Kilduff at Fimat USA in New York.Iran’s deputy nuclear chief, Mohammad Saeedi, warned that the deal with Russia would be off if the International Atomic Energy Agency refers Iran to the Security Council, a step that could lead to sanctions.The United States accuses Iran of seeking to develop nuclear weapons but has backed the proposal if it means enrichment would take place entirely in Russia. Iran denies any intention to build weapons, saying it aims only to produce nuclear energy.On Friday, the benchmark contract gained $2.37 a barrel after a thwarted attack by suicide bombers in explosives-packed cars on a massive oil facility in Saudi Arabia heightened supply fears.”It is likely to be the first of many attacks,” said Kilduff, though he does not believe any significant amount of oil is likely to be taken off the market because of them.Saudi Arabia is the world’s largest oil producer, with output of about 9.5 million barrels per day, or 11 percent of global consumption. The target of the attack, the Abqaiq oil complex in eastern Saudi Arabia, processes about two-thirds of the country’s oil before it is exported.Analysts said they are also worried about supply losses in Nigeria, where 455,000 barrels a day, or 19 percent of the country’s daily production remains down because of recent militant attacks.—AP Business Writer Brad Foss contributed to this report.

Support Local Journalism