LONDON: Brent oil rose for a second day on Thursday after the United States surprised markets by keeping its monetary stimulus programme intact, but gains were capped after Iran's president vowed his government would never develop nuclear weapons.
Brent crude for November delivery gained 33 cents to $110.93 a barrel by 1110 GMT, while US crude was up 70 cents at $108.77.
This was well short of gains for other commodities such as copper, and equities.
Brent and US oil rose the most in three weeks in the previous session as the US Federal Reserve's unexpected decision to delay the wind down of its massive monetary stimulus weakened the dollar and stoked demand for risky assets.
Oil's gains, however, receded after new Iranian President Hassan Rouhani vowed on Wednesday his government would never develop nuclear weapons, his strongest signal yet that he may be seeking a diplomatic thaw with the West after decades of acrimony.
This unwound some of the risk premium associated with fears about a potential confrontation between Iran and the West that is built into oil prices.
"Crude oil has to trade between Fed relief and Iranian belief," said Olivier Jakob, analyst at Petromatrix in Zug, Switzerland.
A more conciliatory tone from Iran has kindled hopes that sanctions on its oil, previously OPEC's biggest after Saudi Arabia, will be eased, improving the global supply picture.
Elsewhere in the Middle East, easing fears of a US-led military strike on Syria also helped to dampen prices, with Western powers meeting for a second day of talks on their draft resolution on eradicating Syria's chemical arsenal.
Comments
Comments are closed for this article.