Oil
falls toward $61 on dollar, supply concerns
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[March 02, 2015] By
Christopher Johnson
LONDON (Reuters) - Brent crude oil fell
almost 2 percent toward $61 a barrel on Monday after Iran said a deal on
its nuclear program could be agreed this week if the West lifted
sanctions, which could boost the country's oil exports.
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Oil prices were also depressed by a stronger dollar and reports of a
rise in Libyan crude output, traders said.
Brent crude hit a low of $61.18 a barrel and was at $61.30 by 7.20
a.m. ET, down $1.28. Front-month Brent jumped 18 percent in
February, the largest monthly rise since May 2009.
U.S. crude was down 95 cents at $48.81 a barrel.
"If there is the political will to accept that an agreement and
sanctions cannot go together, then we can have an agreement this
time," Iranian Foreign Minister Mohammad Javad Zarif said in Geneva.
The dollar hit an 11-year high against a basket of currencies after
a rate cut in China dented the Chinese yuan and also hit emerging
Asian currencies.
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Disruption to oil supplies from members of the Organization of the
Petroleum Exporting Countries has helped support crude with lower
output from Libya and Iraq in January and February.
Iranian oil exports have been restricted by sanctions for several
years as the United States and Europe have responded to Tehran's
nuclear program, which the West says is designed to make atomic
weapons. Iran says its nuclear plans are peaceful.
Analysts say Iran could increase its oil sales fairly quickly if
sanctions were lifted and may eventually be able to raise exports by
up to 1 million barrels per day (bpd). A Reuters survey last week
showed Iran pumped around 2.8 million bpd in February.
Output from other OPEC countries may also be recovering.
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Libya's oil production has risen to more than 400,000 barrels per
day (bpd), officials said.
Carsten Fritsch, senior oil and commodities analyst at Commerzbank
in Frankfurt, said much of the recent strength in oil had been due
to speculative buying.
"All in all the market is still over-supplied by a wide margin,"
Fritsch told Reuters Global Oil Forum. "We expect Brent to come
under pressure again in Q2."
U.S. oil markets are particularly weak with a U.S. refinery strike
denting demand for crude and domestic production still increasing,
despite reports that the number of rigs operating in North America
is falling due to lower prices.
(Additional reporting by Florence Tan in Singapore; Editing by Jason
Neely and Tom Heneghan)
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