LONDON: Brent crude oil gained on Friday, supported by a lack of progress in nuclear negotiations with Iran, returning to fears over supply if tension over the issue intensified.
Brent crude rose 57 cents to $107.12 a barrel by 0909 GMT. US crude added 51 cents to $91.17.
However oil was still down almost 13 percent this quarter, its biggest drop since late 2008, and with a lack of any significant positive newsflow, analysts were braced for further losses.
"There's no real reason for the gain. There is no resolution to the euro zone issues, it just looks like a rebound after a long fall," said Bjarne Schieldrop, analyst at SEB in Norway.
The composite PMI on Thursday indicated core nations such as Germany and France were being caught up in the downturn, even as they made contingency plans to deal with financial and economic turmoil in the event Greece quits the euro.
Talks on Iran's nuclear programme reached a stalemate, with Western countries insisting Iran must cease uranium enrichment before sanctions against it can be eased.
A senior State Department official will travel to Tel Aviv on Friday to reaffirm the US commitment to Israel's security.
The negative tone to the market remained intact, however as US manufacturing growth slowed and China's once booming factories faltered.
Offering a bright spot was the latest data from China indicating that its annual export and import growth showed signs of acceleration in the first 10 days of May.
Iran accused world powers of creating "a difficult atmosphere" that hindered negotiations on its atomic energy programme, stalling diplomatic work to defuse fears of an Iranian attempt to develop nuclear bombs.
After seeming conciliatory before the Baghdad talks, Iran insisted on its right to nuclear fuel enrichment.
Both sides have agreed to meet again next month for talks.
"The Iran situation will probably see a premium being built into oil prices regardless of the situation in Europe as I think the $15 destruction in prices we've seen (since early May) has already factored in the risk of Greece exiting the euro zone," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.
Rising tension over the past year has pushed global oil prices upwards as the West has broadened sanctions to bar Iran's crude oil exports.
Comments
Comments are closed for this article.