Tuesday, March 6, 2012

Oil below $107 after US, Israel meet on Iran

In this March 2, 2012 photo, Al Milani of Staten Island, pumps gas in Manhattan at a BP mini-mart. The price at the gas pump rose over the weekend and the nationwide average is nearing $3.80 a gallon. Oil is close to $107 per barrel because of tensions tied to Iran's nuclear program. (AP Photo/Gene J. Puskar)

In this March 2, 2012 photo, Al Milani of Staten Island, pumps gas in Manhattan at a BP mini-mart. The price at the gas pump rose over the weekend and the nationwide average is nearing $3.80 a gallon. Oil is close to $107 per barrel because of tensions tied to Iran's nuclear program. (AP Photo/Gene J. Puskar)

(AP) ? Oil prices hovered below $107 a barrel Tuesday in Asia after U.S. and Israel leaders met to discuss growing tensions over Iran's nuclear program.

Benchmark oil for April delivery was down 2 cents to $106.70 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 2 cents to settle at $106.72 per barrel in New York on Monday.

Brent crude was steady at $123.80 per barrel in London.

After a meeting Monday in Washington, President Barack Obama and Israeli Prime Minister Benjamin Netanyahu showed no sign of give on competing ways to resolve the crisis. Obama urged pressure and diplomacy to prevent Iran from getting a nuclear bomb while Netanyahu emphasized his nation's right to a pre-emptive attack.

The U.S., Europe, Israel and other nations fear that Iran may be building a nuclear weapon. Iran, the world's third-largest oil exporter, denies the charge.

"The Iranian fear premium didn't change in our view," energy consultant Ritterbusch and Associates said in a report.

Crude has risen from $96 last month amid investor concern that a military conflict aimed at destroying Iran's nuclear capabilities would disrupt global oil supplies. Analysts say Saudi Arabia and other oil producers do not have enough spare capacity to quickly make up for Iran's 4 million barrels a day of crude.

Analysts estimate crude would jump to $150 in the wake of an attack by Israel on Iran's nuclear operations.

"The risk of a supply disruption due to geopolitical factors is uncomfortably high and increasing," said Richard Soultanian of NUS Consulting.

In other energy trading, heating oil fell 0.6 cent to $3.21 per gallon and gasoline futures were steady at $3.26 per gallon. Natural gas fell 0.5 cent at $2.35 per 1,000 cubic feet.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-03-05-Oil-Prices/id-aa7cd324d33c4b1fabf1ec7af340b530

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