At the start of the week, oil traded under $97 per barrel. Optimistic news came out from the Middle East. Direct negotiations between US and Iran seem now possible. Investors await for more news on the nuclear issue and prepare for profits.
In electronic trading on the New York Mercantile Exchange Benchmark crude for March delivery slid down by $1.03 to $96.74 per barrel. This is a strong decline after the contract finished on Friday at $97.77 per barrel on the Nymex.
On the ICE Futures exchange in London – international oil standard – Brent crude fell by 81 cents to trade at $115.95 per barrel.
Tension in the Middle East is one of the drivers for the oil price. There are rising concerns about the safety of oil supplies coming from MENA. Additional sanctions made it even more difficult for Iran to sell its crude output.
According to the US Vice President, a shift in the approach is very likely. Washington is now ready to reach for direct negotiations over the nuclear program of Iran. On the other side Teheran claims that nuclear power is only for peaceful aims. The foreign minister of Iran welcomed the proposal. Though, he didn’t take any commitment to it.
By now there was almost no progress over the nuclear negotiations between US, German and Iran. So analysts saw the possibility of direct talks as good opportunity.
Crude prices also fell on the back of stronger dollar. This makes oil more expensive and a less appealing investment for other currency owners. The euro slid to $1.3559 to trade at $1.3652.