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 Benchmark U.S. crude for January delivery fell 75 cents to close at
$94.09 in New York. Brent crude, a benchmark for international oil
used by many U.S. refineries, slipped half a cent to $111 a barrel
in London.
The preliminary agreement reached in Geneva Sunday between Iran and
the U.S., Britain, France, Russia, China and Germany over Iran's
nuclear program does not allow Iran to increase oil exports. But by
relaxing some financial restrictions the agreement does make it
easier for Iran to sell the oil it is permitted to.
It also removes, for now, the threat of further restrictions on
Iranian exports and sets up the possibility that a more
comprehensive deal will be struck in the coming months.
The diminished threat to global supplies is likely to make crude
cheaper in the short term. And if more Iranian oil returns to
international markets, the additional supply is likely to make crude
less expensive over the longer term.
"With new domestic output capacity coming on line, plus the
potential reemergence of Iranian barrels coming onto the global
market, the table is set for lower prices over the longer term,"
energy analyst Stephen Schork said in a market commentary.
For now, analysts expect Iran's oil exports to remain at around 1
million barrels a day, with most of the flow soaked up by Asian
countries like China, India and Korea. That is still far below the
2.5 million barrels a day Iran was exporting in 2011, before
sanctions began.
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"Iran is still a long way from resuming full oil exports, but the
prospect is already being priced in the market," analysts noted in
the Kilduff Report edited by Michael Fitzpatrick.
In other energy futures trading on Nymex:
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Wholesale gasoline fell 3.75 cents to $2.67 gallon.
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Heating oil fell less than a penny to $3.03 a gallon.
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Natural gas rose 3.1 cents $3.84 per
1,000 cubic feet.
[Associated
Press]
Associated Press writer Pablo Gorondi contributed to this report
from Budapest.
Copyright 2013 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
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