Continued oil market turmoil weighs on global stocks

Oil-price turmoil gripped markets once more Tuesday, a day after US crude futures crashed below zero for the first time as the coronavirus crisis crippled global energy demand and worsened a supply glut.

The commodity rout also sent world equity markets spiraling lower, as investors fretted it could compound an expected deep global economic downturn.

The benchmark WTI price collapsed Monday to an unprecedented low of minus $40.32. Negative prices mean traders must pay to find buyers to take physical possession of the oil -- a job made difficult with the world's storage capacity at bursting point.

A day after its historic slide into negative territory amid a supply glut, US oil futures finished in positive territory.

But the market remained under heavy pressure due to the oversupply as coronavirus shutdowns constrain global growth.

Storage is a particularly big problem in the US where WTI oil is delivered at a single, inland point.

In Europe, where Brent is the benchmark, there are several delivery sites and their proximity to the sea allows some of it to be stored on tankers.

"Players are now paying buyers to take oil volumes away as the physical storage limit will be reached. And they are paying top dollar," said Rystad Energy analyst Louise Dickson.

This week's massive sell-off came just ahead of Tuesday's expiration of the May contract. Most trading has now moved to the June contract, and May WTI was back in positive territory by the close of New York trading.

- 'Slice of pizza' -

Oil markets have been ravaged this year after the pandemic was compounded by a price war between Saudi Arabia and Russia.

"Ever thought that it could be imaginable to see the price of US oil valued at less than a pizza? Or even a slice of pizza? How about for it to actually cost (money) to sell US crude?" said Jameel Ahmad, head of currency strategy and market research at FXTM.

While the two big oil-producing nations have drawn a line under the dispute and agreed with other countries to slash output by almost 10 million barrels a day, that is not enough to offset the lack of demand and prices have remained low.

European benchmark Brent North Sea oil for June delivery tumbled to an 18-year low, before coming off worse levels in volatile deals.

- Stock markets sink -

Equity markets were meanwhile also deep in the red on Tuesday, having enjoyed a healthy couple of weeks thanks to massive stimulus measures and signs of an easing in the rate of new infections globally.

Key eurozone stocks markets closed with declines of up to four percent, while London did a little better thanks to a weaker pound.

On Wall Street, the Dow finished down more than 630 points, or 2.7 percent.

"Continued dysfunction in the crude oil markets" was the main factor behind the decline, analysts at Charles Schwab said, "while the Street continues to assess the timing of when the US economy may be able to reopen."

Analysts warned the drop in stock markets could be an indication that the recent surge may have been hasty, and that another prolonged sell-off is possible.

- Key figures around 2030 GMT -

West Texas Intermediate (May delivery): UP at $10.01 per barrel

West Texas Intermediate (June delivery): DOWN 43 percent at $11.57 per barrel

Brent North Sea crude (May delivery): DOWN 22.1 percent at $19.93

Brent North Sea crude (June delivery): DOWN 24.4 percent at $19.33

New York - Dow: DOWN 2.7 percent at 23,018.88 (close)

New York - S&P 500: DOWN 3.1 percent at 2,736.56 (close)

New York - Nasdaq: DOWN 3.5 percent at 8,263.23 (close)

London - FTSE 100: DOWN 3.0 percent at 5,641,03 points (close)

Frankfurt - DAX 30: DOWN 4.0 percent at 10,249.85 (close)

Paris - CAC 40: DOWN 3.8 percent at 4,357.46 (close)

EURO STOXX 50: DOWN 4.1 percent at 2,791.34 (close)

Tokyo - Nikkei 225: DOWN 2.0 percent at 19,280.78 (close)

Hong Kong - Hang Seng: DOWN 2.2 percent at 23,793.55 (close)

Shanghai - Composite: DOWN 0.9 percent at 2,827.01 (close)

Euro/dollar: DOWN at $1.0859 from $1.0862 at 2100 GMT

Dollar/yen: UP at 107.77 yen from 107.62

Pound/dollar: DOWN at $1.2301 from $1.2442

Euro/pound: UP at 88.27 pence from 87.30

burs-jmb/cs

Agence France-Presse

Oil prices little changed as U.S. oil stocks data disappoints

SINGAPORE - Oil prices were little changed in early Asian trade on Thursday as an unexpected build in U.S. gasoline inventories offset a higher than forecast draw in U.S. crude inventories, while Brent was supported by buoyant manufacturing figures from Europe.

Brent crude for August delivery rose 10 cents to $63.59 a barrel by 0130 GMT (0930 EDT), after settling down 96 cents, or 1.5 percent, in the previous session.

U.S. crude for August delivery shed 9 cents to $60.18 a barrel, after ending the previous session down 74 cents, or 1.2 percent.

"The market is disappointed with last night's numbers," said Mike McCarthy, chief market strategist at Sydney's CMC Markets.

"The spread (between Brent and U.S. crude) had narrowed so it's not surprising it's diverging," McCarthy said.

The spread between Brent and West Texas Intermediate had narrowed towards $3 in trading on Wednesday but was widening in early trade on Thursday.

He said Brent was being supported by strong data from the Euro zone earlier this week which showed private businesses expanded at their fastest pace in four years this month.

But U.S. crude was down due to the larger than expected build in gasoline inventories after the U.S. Department of Energy's Energy Information Administration released oil stocks data on Wednesday.

The build in gasoline stocks came despite U.S. gasoline demand in the week to June 19 being at highest level for the period since 1991.

U.S. gasoline stocks climbed 680,000 barrels to 218.49 million in the week to June 19, compared with a Reuters poll which expected a 304,000-barrel drop, EIA data showed.

That was despite a larger than expected fall in U.S. crude inventories, which fell for the eighth straight week, by 4.9 million barrels to 462.99 million, in the week ending June 19, compared with analyst expectations of a 2.1 million barrel draw, the EIA said.

source: interaksyon.com

Brent drops toward $59 as dollar firms on U.S. jobs data

SINGAPORE - Brent crude fell toward $59 a barrel on Monday as a promising U.S. jobs report pushed the dollar up, offsetting geopolitical tensions and the threat of output cuts in Libya and Iraq.

The dollar hit a more than 11-year high against a basket of currencies after data showed the U.S. unemployment rate fell to the lowest since May 2008 in February, making commodities priced in the greenback costlier for holders of other currencies

Brent eased 43 cents to $59.30 by 0445 GMT, after dropping 75 cents in the previous session. It fell 4.6 percent last week in its biggest decline since the week ended Jan. 9.

U.S. crude was down 27 cents at $49.34. It closed down $1.15 on Friday to complete a third week of declines.

Goldman Sachs  said in a note that oil prices would reverse recent gains on rising global inventories, with U.S. crude expected to drop to around $40 a barrel.

Oil prices rose by almost a third between January and February on the back of Middle East supply disruptions, strong winter demand and high refinery margins.

But the focus is now on the dollar, analysts said.

"The U.S. dollar is continuing to strengthen. In the short-term it's more about the dollar than anything else," said Ben LeBrun, market analyst at Sydney's OptionsXpress.

U.S. economic data to be released on Tuesday could lead to a further strengthening of the U.S. dollar which would be negative for commodities including oil, said LeBrun.

He said geopolitical issues in North Africa and the Middle East "are all playing second fiddle to the U.S. dollar".

Goldman said in its note that "absent further unexpected OPEC disruptions, we expect Brent oil prices and timespreads to reverse their recent strength".

Members of the Organisation of the Petroleum Exporting Countries (OPEC) should not cut output to "subsidize" higher-cost shale, OPEC Secretary-General Abdullah al-Badri has said.

In Libya, up to 10 foreign workers are missing in the latest attack on the country's oil fields by Islamist militants and there is a possibility they have been taken hostage, Czech and Libyan officials said on Saturday.

Brent should trade within a range of $55.36-$63.04 this week, said Singapore's Phillip Futures in a note on Monday.

U.S. crude should trade between $48.45-$55.02 although prices could move sharply upwards if the U.S. refinery strikes end this week, Phillip Futures said.

source: interaksyon.com

Oil up from early sell-off as Brent sets 2015 high

NEW YORK - Oil closed up after a weak start on Tuesday, with Brent crude rising to a 2015 high of $63 a barrel as short-covering returned to a market depressed earlier by worries about euro zone stability.

Threats to Middle East crude production and the falling U.S. oil rig count seemed to spur market bulls despite global inventory data suggesting an oversupply of up to 2 million barrels per day, analysts and traders said.

"We're in this mode where the market continues to discount bearish news," said Dominick Chirichella, senior partner at the Energy Management Institute in New York. "Certainly there is some positive news out there about Libya and rest of the Middle East, but I don't see anything that's overly bullish."

Options for the front-month March contract in U.S. crude oil also expired on Tuesday, possibly adding to the rebound, brokers said. A similar upward move was observed a month ago when options expired in the previous front-month contract for U.S. crude.

Brent oil's front-month contract for April delivery settled up $1.13 at $62.53 a barrel, rebounding from the day's low of $60.27. The session peak of $63 was the highest since Dec. 18.

U.S. crude futures for March CLc1 closed up 75 cents at $53.53, versus an intraday low at $50.81.

Oil prices slumped about 60 percent between June and January on fears of a supply glut. Since February began, they have rebounded more than 10 percent on short-covering spurred by speculation that the market had hit bottom and concerns about fighting in the Middle East.

Violence in Libya has shut all major ports and oil exports from the country have collapsed to just a trickle.

Iraq's semi-autonomous Kurdistan Regional Government has threatened to withhold oil exports if Baghdad failed to send its share of the budget.

The International Energy Agency's chief economist Fatih Birol said on Tuesday the rise of Islamic State presented a major challenge for the investment necessary to prevent an oil shortage in the next decade.

Market bears, meanwhile, point to a Reuters poll that shows U.S. commercial crude oil stockpiles likely rose again in the week ended Feb. 13 to record highs above 420 million barrels.

Oil was down earlier in the day after Greece rejected an international bailout plan. In east Ukraine, pro-Russian rebels and government forces fought street-to-street, further dampening hopes that a European-brokered peace deal will end the conflict.

source: interaksyon.com

Stocks rally on U.S. data, euro slides further

NEW YORK - Wall Street stocks rebounded on Friday on signs the U.S. economy was on track for solid growth with consumer sentiment hitting an 11-year high, while the euro slid further against the dollar a day after Switzerland ditched its currency cap.

Crude prices rallied on the U.S. sentiment report and after the International Energy Agency said lower prices had begun to curb production in some areas, including North America. The IEA said prices might fall further, but "signs are mounting that the tide will turn."

U.S. gasoline prices fell again in December, leading consumer prices to post their biggest decline in six years, while a gauge of underlying inflation was flat. The data could make the Federal Reserve cautious about raising interest rates.

Global equity markets rebounded, with U.S. stocks capping five straight sessions of losses. European shares rose on growing expectations of economic stimulus from the European Central Bank.

Wall Street surged at the close. Major U.S. indexes rose more than 1 percent in what Ken Polcari, director of the NYSE floor division of O'Neil Securities in New York, said had the makings of a relief rally.

"The market has been under complete duress for five or six days, the tone has been very ugly. Today it seems most things have calmed down, so buyers have started to step back in," he said.

The University of Michigan said U.S. consumer sentiment rose in January on employment and income gains, with spending power boosted by sliding gasoline prices.

The "outstanding" report countered fears that tumbling oil prices would curb growth, said Phil Orlando, chief equity strategist at Federated Investors in New York. He said cheaper energy will boost discretionary spending, and added that a disappointing retail sales report this week excluded online sales and gift cards and was skewered by seasonal factors.

"The psychology of the market has been horribly negative for the last couple of weeks," said Orlando. "What turned the market around today was plain and simple: the Michigan number was outstanding."

The day after the euro lost Swiss support, the single currency slid to $1.1461, its weakest since November 2003. It last traded at $1.1567, down 0.52 percent. Against the yen, the dollar was up 1.23 percent at 117.59 yen.

On equity markets, MSCI's all-country world index gained 0.76 percent. The pan-European FTSEurofirst 300 index of leading regional companies closed up 0.99 percent at 1,407.17 points.

Swiss stocks sank again on concerns a stronger franc will hurt Swiss multinationals that depend on exports. The Swiss blue-chip index SMI closed down 6 percent.

Morgan Stanley estimated that 85 percent of Swiss company sales come from abroad.

The Dow Jones industrial average closed up 190.86 points, or 1.1 percent, at 17,511.57. The S&P 500 rose 26.75 points, or 1.34 percent, to 2,019.42 and the Nasdaq Composite added 63.56 points, or 1.39 percent, to 4,634.38.

U.S. Treasuries prices fell after the strong consumer sentiment and tame inflation reports sparked profit-taking on recent gains.

The 10-year U.S. Treasury note fell 15/32 in price, pushing the yield up to 1.8257 percent.

Brent crude futures for March delivery rose $1.90 to settle at $50.17 a barrel. U.S. crude settled up $2.44 at $48.69 a barrel.

source: interaksyon.com

Oil prices extend slide as growing glut triggers floating storage

SINGAPORE - Oil prices slid in early Asian trade on Wednesday after touching their lowest in nearly six years the previous session, with analysts predicting further falls as oversupply plagues the market.

Oil tumbled 5 percent to near six-year lows on Tuesday, with the Brent crude international benchmark briefly trading at par to U.S. prices for the first time in three months as some traders moved to take advantage of ample U.S. storage space.

February Brent crude had dropped 40 cents since its last settlement to $46.19 a barrel by 0238 GMT. U.S. crude for February was trading at $45.60 a barrel, down 29 cents.

Analysts said prices would stay under pressure as oversupply hurts both the American WTI contract and globally traded Brent, with some traders beginning to book ships for oil storage.

"Our latest forecast calls for Brent oil to average $45 per barrel during 1Q15 (the first quarter of 2015)," Nomura bank said on Wednesday.

Oil storage trends also imply further price falls, with U.S. stocks possibly approaching 80 percent of capacity by the upcoming spring season, according to U.S.-based PIRA Energy Group.

"The last time the United States built inventories in December was in the middle of the financial crisis in 2008," the firm said.

Outside the United States, some of the world's biggest oil traders have booked supertankers to store at least 25 million barrels at sea in recent days, seeking to take advantage of the crash in crude prices and make a profit down the line.

"Once floating storage starts, there is very little support on the downside for Brent spreads," Energy Aspects said.

U.S. crude prices have been cheaper than Brent almost without interruption as soaring North American shale oil production pulled down prices while the rest of the world market remained more tightly supplied.

But with oil producer club OPEC deciding late last year to maintain its output despite slowing Asian and European economic growth and to defend its market share, including against surging U.S. competition, a glut has also appeared outside the United States, pulling down Brent prices close to U.S. levels.

"The closing gap looks to be solidifying Saudi Arabia's strategy to curb shale production and protect market share," ANZ bank said.

source: interaksyon.com

Oil, stocks go their separate ways

NEW YORK - Investors have wrung their hands over the last several weeks over the effect of lower oil prices on the broader S&P 500, but the relationship between the two is actually starting to break down.

Crude prices had dropped more than 10 percent in the trading week ended Dec. 12. That was largely responsible for a 3.5 percent drop in the S&P 500, as investors fled stocks over concerns about energy-sector bonds, corporate earnings, and expectations for world economic demand.

That seemed to change Thursday. The S&P 500 surged while oil fell, a potential change in sentiment among investors looking to focus on sectors that may benefit from an accelerating U.S. economy.

"The proof is that oil turned down and the market said, 'Oh, that was yesterday's news, today we're moving ahead,'" said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.

Bank of America Merrill Lynch credit strategist Hans Mikkelsen credited the decoupling partly to Fed Chair Janet Yellen's Wednesday news conference.

"She explained how declining oil prices are expected to be a net positive for the U.S. economy. Furthermore, she went out of her way to dismiss any downward pressure on inflation as transitory."

Investors may have already priced in the effect of cheaper oil on energy-sector earnings and are now starting to weigh the positives for other sectors.

In its 2015 global outlook, fund manager Pimco said the fall in energy costs, because it is largely supply-driven, should ultimately help growth in major economies, including the United States, Japan, and the euro zone.

Fourth-quarter energy-sector earnings are expected to decline 19.2 percent from a year ago; on October 1, growth of 6.6 percent was expected.

"You will see some pain in the short term because of fourth quarter earnings," said James Liu, global market strategist at JPMorgan Funds in Chicago. "So the broad S&P 500 will take a hit based on that, but over the next several quarters it is clearly going to be a good thing."

As recently as Tuesday, the 10-day correlation between the S&P 500 and Brent crude stood at 0.97, meaning each moved in almost perfect sync with the other. The correlation has been breaking down and last stood at 0.42, with Brent stumbling 3.1 percent, while the S&P 500 surged 2.4 percent, on Thursday.

According to data from S&P, energy has fallen to a market share representation of 8.31 percent, from 9.7 percent at the end of the third quarter, as names such as Denbury Resources, Nabors Industries and Halliburton have each tumbled more than 35 percent.

With investors hoping oil prices have at least stabilized as Brent hovers around the $60 mark, selling pressure could resume on equities if the downward march for oil begins again, weighing on the broader S&P index and tightening the correlation.

source: interaksyon.com

Oil prices rise in Asian trade amid falling US inventories

SINGAPORE - Oil prices edged higher in thin Asian trade Monday as investors focused on a fall in US crude inventories, indicating robust demand in the world's top consumer.

New York's main contract, West Texas Intermediate (WTI) for February delivery, was up two cents at $100.34 in afternoon trade while Brent North Sea crude for February gained 19 cents to $112.37.

The US Department of Energy on Friday reported that crude inventories for the week to December 20 fell by 4.7 million barrels, more than the 2.2 million expected by analysts in a Wall Street Journal survey.

The decline was the fourth consecutive drop after a 10-week run of rises that added 35 million barrels to total stockpiles.

Desmond Chua, market analyst at CMC Markets in Sydney, said the falling inventories in the world's biggest economy underscored "stronger demand as the global outlook brightens".

The upbeat stockpiles report released on Friday, delayed due to the Christmas holidays, is supporting WTI prices above the "psychologically important" $100 mark, Chua said.

The report came amid other signs the US economy is picking up. Data released last week showed new home sales, durable goods orders and jobless claims also bested expectations.

Investors meanwhile continue to monitor developments in South Sudan, where violence in a key oil-producing region has dented crude output and led to numerous oilfield staff evacuations.

More than 1,000 people have died since fighting between forces loyal to President Salva Kiir and former vice president Riek Machar broke out on December 15.

The United Nations said in a statement that the number of people who have taken refuge in its bases around the country has grown to 75,000.

Analysts say the fledgling producer usually exports about 220,000 barrels of crude oil a day to Japan, Malaysia and China.

source: interaksyon.com

Oil rises in Asia on Fed stimulus

SINGAPORE - Oil prices rallied in Asia Friday as traders welcomed a fresh, third round of bond-buying, or quantitative easing, announced by the US Federal Reserve, analysts said.

New York's main contract, light sweet crude for delivery in October surged 91 cents to $99.22 a barrel in the afternoon and Brent North Sea crude for November delivery added 63 cents to $116.51.

Crude markets rose after traders' hopes for stimulus announcements at the end of a two-day Fed meeting Thursday were met, IG Markets said in a report.

The Fed on Thursday announced the new, open-ended $40 billion per month programme that it said would remain in place until there was substantial improvement in the jobs market.

"Never fear, QE3 is here. At long last the markets got what they wanted as (Fed chief Ben) Bernanke finally announced another ambitious bond-buying programme he hopes will lead to a sustainable recovery in the US economy," the report stated.

"The icing on the cake announced last night was that no defined time limit was announced for QE3."

The Fed also pledged to keep its benchmark interest rate at ultra-low levels until at least mid-2015.

source: interaksyon.com

Oil rises in Asia on Fed stimulus hopes

SINGAPORE - Crude advanced in Asia on Thursday as hopes rose that the US Federal Reserve would kickstart the economy of the world's largest oil consumer, analysts said.

New York's main contract, light sweet crude for delivery in October rose 43 cents to $97.69 a barrel and Brent North Sea crude for October delivery gained 48 cents to $115.39.

Hopes for a fresh round of quantitative easing from the Fed were boosted Wednesday when minutes of its last policy meeting were published, IG Markets said in a report.

The minutes from the Federal Open Market Committee meeting three weeks ago showed there was support by "many members" for additional stimulus to the US economy soon unless economic data turns around.

"Having spent the last few months watching from in the stands, QE3 is now sitting on the bench waiting for the call to come on as a last-gasp substitute," the IG report said, referring to a new round of quantitative easing.

"That is how things look this morning after Fed minutes stated that another round of large-scale asset purchases could happen 'fairly soon'."

The minutes said: "Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial strengthening in the pace of the recovery."

source: interaksyon.com

Gas prices turn upward after long skid

(CNN) -- U.S. gasoline prices have gone up by nearly a dime a gallon in the past two weeks, reversing a three-month slide amid an increase in crude oil costs, according to a new nationwide survey.

The average prices of a gallon of regular gasoline at filling stations in the continental United States jumped about 9.6 cents per gallon, to just under $3.51, according to the latest Lundberg Survey. Gas prices had been falling since April 6, skidding downward by 56 cents a gallon by mid-July, survey publisher Trilby Lundberg said Sunday.

The price of crude oil -- the largest single component of gasoline -- on the New York futures market went up about $3 a barrel in the past two weeks, closing Friday at more than $90. That helped drive prices upward, Lundberg said. But she said motorists may see "a comparative period of stability" at the pump.

"Weakness in demand around the world from economic conditions is keeping the price from rising further, while the Middle East tensions and a great deal of noise in the currency markets about the possibility of printing more money in Europe and the United States is having the effect of raising the price of crude," she said.

The Lundberg Survey samples prices at about 2,500 gas stations across the Lower 48 every two weeks, most recently on Friday. Lundberg said the current price is still 46 cents below the April peak and down more than 10 cents from a year ago.

Jackson, Mississippi, had the cheapest average prices in the latest survey, at $3.14 a gallon. The highest were on Long Island, New York, at $3.83.

A sampling of prices in other U.S. cities:

Atlanta: $3.49

Baton Rouge. Louisiana: $3.30

Boston $3.62

Cleveland: $3.45

Denver: $3.47

Phoenix: $3.21

Portland, Oregon: $3.58

San Francisco: $3.80

source: CNN

US Crude Oil Supplies Shrank by 100,000 Barrels

NEW YORK (AP) — The nation's crude oil supplies fell slightly last week, the government said Wednesday.

Crude supplies declined by 100,000 barrels, to 384.6 million barrels, which is 4.2 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report.

Analysts expected a drop of 1 million barrels for the week ended June 1, according to Platts, the energy information arm of McGraw-Hill Cos.

Gasoline supplies grew by 3.3 million barrels, or 1.7 percent, to 203.5 million barrels. That's 5.1 percent less than year-ago levels. Analysts expected gasoline supplies to increase by 500,000 barrels.

Demand for gasoline over the four weeks ended June 1 was 4 percent lower than a year earlier, averaging 8.8 million barrels a day.

U.S. refineries ran at 91 percent of total capacity on average, up 2.9 percentage points from the prior week. Analysts expected capacity to rise to 88.7 percent.

Supplies of distillate fuel, which include diesel and heating oil, rose by 2.3 million barrels to 120 million barrels. Analysts expected distillate stocks to grow by 600,000 barrels.

Benchmark U.S. crude rose $1.57 to $85.86 a barrel in New York.

source: nytimes.com

Oil dips in Asia on eurozone debt woes

SINGAPORE—Oil prices eased in Asian trade Friday on growing fears about the eurozone's debt troubles but the falls were tempered by worries about the nuclear standoff between the West and Iran, analysts said.

New York's main contract, West Texas Intermediate crude for delivery in July was down two cents to $90.64 per barrel while Brent North Sea crude for July shed 23 cents to $106.32 in the afternoon.

"Oil prices continue to decline as macroeconomic sentiment continues to weaken, with the lack of concrete measures on the part of European policymakers to address the Greek issue," Barclays Bank said in a commentary.

It said the lack of a policy response to Greece's possible exit from the euro was "weighing significantly across all risk assets."

Shortly after a European Union summit that ended Thursday failed to produce a conclusive plan on dealing with Athens, a May survey of eurozone business confidence showed the sharpest monthly fall for nearly three years.

A Greek general election set for June 17 is expected to result in a win for anti-austerity parties who have said they will tear up a bailout deal with the European Union and International Monetary Fund.

Such a move would in effect lead to the country's euro exit, which analysts warn could have disastrous knock-on effects for the global economy.

Investors are also keeping close watch on the nuclear row between Iran and the West after talks between the two sides ended on Thursday with few results except to fix a date to meet again next month.

P5+1 nations–Britain, China, France, Russia and the United States plus Germany–had laid out a new package of proposals to persuade Iran to suspend uranium enrichment, which was flatly rejected by Tehran officials.

Iran has faced a raft of sanctions from the international community over its nuclear program, seen by many as a guise for atomic weapons push.

Iran has insisted that the program is for purely peaceful purposes.

"Getting Iran to the table is one thing, getting them to back down is quite another," said Justin Harper, market strategist at IG Markets Singapore. —Agence France-Presse

source: gmanetwork.com

Oil prices recover on Middle East supply concern

Singapore - Oil prices recovered from multi-month lows in Asian trade Monday as analysts said concerns over Middle East supply were resurfacing.

Oil was also supported by Group of Eight (G8) leaders calling for Greece to stay in the eurozone at a weekend summit in the United States as they debated deep divisions about how best to tackle Europe's fiscal woes.

New York's main contract, West Texas Intermediate crude for delivery in June was up 37 cents to $91.85 per barrel while Brent North Sea crude for July gained 77 cents to $107.91 in the afternoon.

"The Middle East concerns are coming back into the market, and the upcoming talks between Iran and Western countries is being seen as a crunch point for oil," said Justin Harper, market strategist at IG Markets Singapore.

"The G8's commitment to growth and to keep Greece in the eurozone has also spurred the market," he added.

G8 leaders on Saturday sent a strong message to major producer Iran that tough sanctions imposed over its nuclear programme would be firmly applied, days before the next round of nuclear talks between global powers and Tehran in Baghdad.

Iran faces a raft of sanctions from the United Nations, the United States and the European Union over suspicions that the Islamic republic's nuclear program masks a push to develop atomic weapons.

Tehran has so far denied the charges, and threatened to blockade the strategic strait of Hormuz if it is faced with further measures.

Meanwhile, market fears over the eurozone's debt troubles were slightly soothed by a broad agreement by the G8 leaders for the bloc to embrace growth measures along with austerity as a way to stave off a major debt contagion.

"The G8 talk of helping global economic growth has helped steady the ship a little in these choppy waters," said Harper.

DBS Bank said however that the G8 statement was "long on promises and short on details" and that attention had now shifted to an EU informal summit on Wednesday.

The G8 club of developed nations is made up of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States. — AFP

source: gmanetwork.com