SINGAPORE: Oil prices were mixed in Asian trade Tuesday as concerns over a sudden glut in Iranian supply eased amid scepticism over the international agreement on its controversial nuclear programme.
New York's main contract, West Texas Intermediate (WTI) for January delivery, was up 27 cents at $94.36 in mid-morning trade while Brent North Sea crude for January was eight cents lower at $110.92.
Oil had retreated steeply in Asian trading hours on Monday in reaction to Sunday's deal, in which major powers and Iran agreed to some modest sanctions relief in exchange for tighter oversight of Iran's nuclear programme while the parties try to hash out a more comprehensive accord on Iran.
Prices however pared losses to end only modestly lower in New York trade.
"The initial knee-jerk sell off came with the easing of the build-up in geopolitical risk premium," Desmond Chua, market analyst at CMC Markets in Singapore, said in a note.
"Nonetheless,the decline was short-lived as traders understood that the deal will not see a glut of oil supply."
The deal agreed in Geneva between Iran and the so-called P5+1 nations comprising the United States, China, France, Britain, Russia and Germany, will deliver about $7 billion (5.17 billion euros) in relief to Iran, according to US estimates, and will stand for six months while a more long-lasting solution is negotiated.
It includes giving Iran very limited access to its income from oil and other sales, frozen in banks overseas, to be used for humanitarian purposes. While the deal protects the country's oil exports at current levels, it does not allow for further growth.
The Islamic republic has been crippled by a series of UN and US sanctions aimed at bringing an end to its nuclear drive, which the West claims is being used to develop atomic weapons. Iran denies the assertion.
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