Oil prices steady as Iran-Britain issue appears closer to a resolve

04-Apr-07

Yesterday, Britain called for direct talks with Iran to resolve a dispute over 15 captive marines and sailors after its first contact with the chief Iranian negotiator. Oil prices steadied in Asian trading as the market nursed a guarded optimism that the standoff between Iran and Britain would be resolved diplomatically. Light, sweet crude for May delivery slipped to US$64.62 a barrel in electronic trading on the New York Mercantile Exchange midmorning in Singapore. Earlier this week, the fear that Iran could disrupt the oil trade had caused traders to add a risk premium in recent weeks Britain's announcement followed the sudden release of an Iranian diplomat in Iraq that raised new hope for resolving the issue. This caused the biggest decline in nearly a month, and the biggest single day drop since March 5, as oil prices dipped by US$1.30. It was crude's second decline in the last 11 sessions and its biggest single day drop since March 5. Prices had risen steadily since the 15 Britons were detained March 23 by Iran for allegedly entering Iranian waters.