- POSTED: 24 Sep 2013 03:57
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Oil prices fell sharply on Monday amid easing concerns about Middle East tensions and their potential impact on oil supplies.
NEW YORK: Oil prices fell sharply on Monday amid easing concerns about Middle East tensions and their potential impact on oil supplies.
New York's main contract, West Texas Intermediate for November, closed at $103.59 a barrel, a decline of $1.16 from Friday's close.
Brent North Sea crude for delivery in November shed $1.06 to settle at $108.16 a barrel in London trade.
"Supply-side concerns appear be diminishing. A military action against Syria looks increasingly unlikely, while the new Iranian president has signaled his willingness to negotiate over Tehran's nuclear program," said Fawad Razaqzada of GFT.
"On top of this, production from South Sudan has reached its highest since early 2012 while production in Libya has also resumed in parts of the country," weighing on prices, he said.
Addison Armstrong of Tradition Energy agreed Middle East concerns were abating. "The risk premium related to Syria that had built in the oil markets continues to ease," he said.
The European Union announced Monday that Iran's foreign minister would meet major powers this week on Tehran's nuclear program in what could be a historic top-level contact with the United States.
Catherine Ashton, the EU foreign policy chief, announced the meeting after what she called a "good and constructive" meeting at the UN headquarters with the foreign minister of Iran's new government, Mohammad Javad Zarif.
Western nations accuse Iran of seeking a nuclear bomb capability. Iran's new president, Hassan Rowhani, said last week that his country would "never" build a bomb.
Commerzbank analysts said Iran was aiming to have the Western sanctions eased, which have caused Iran's oil exports to fall by more than half, to below 1 million barrels per day.
"Although the country is unlikely to return quickly to its pre-sanctions production level, the incipient diplomatic detente could prompt further financial investors to exit the market," Commerzbank said in a research note.