Oil prices in New York traded near three-day high after China’s premier Wen Jiabao asked to put in more efforts to boost the nation’s economy and speculations over Obama administration hardening its stance on sanctions against Iran on the eve of talks between Tehran and major powers.
Benchmark oil rose $1.09 to finish at $92.57 per barrel Monday in New York. Brent crude increased $1.67 to $108.81 per barrel in London.
The U.S. will not support easing of sanctions against Iran when the world power meet in Baghdad tomorrow during the second round of talks on Tehran’s nuclear program. The U.S. and Western powers believe that Iran is developing a nuclear weapon while Tehran is adamantly denying the charge.
Oil prices also showed some signs of recovery, after developments expected raised oil demand in the world’s two biggest economies – United States and China.
China’s premier Wen Jiabao said that more priority should be given to maintaining growth after the country’s economic growth fell to a nearly three year low of 8.1 percent in the first quarter. Also, commodity demand was hurt by the drop in factory production in April which was at its lowest since the 2008 financial crisis.
Though China’s statements and Iran talks show promise, Greece economic crisis persists ahead of the election next month. If the future ruling party opposes the austerity measures, then Greece’s bailout funding could be in jeopardy resulting in the country leaving the Eurozone. In such a case, financial insecurity across Europe could hurt energy demand.
Wen Jiabao: Creative Commons/World Economic Forum
Iran’s Bushehr Nuclear Power Plant: AP/ISNA,Mehdi Ghasemi