As leading crude producer Iran and Western powers failed to reach agreement over Tehran’s nuclear programme, oil prices increased as the dollar fell down against the euro on May 28th 2012.
Western Texas Intermediate Crude profited $1.01 to $91.87 a barrel for delivery in July according to New York’s main contract. Brent North Sea crude gained $1.14 to $107.97 for delivery in July according to London midday deals.
The argument over the Tehran’s uranium enrichment and stockpile stayed at the focal point of talks between Iran and major world powers, who think Iran is structuring atomic weapons. Iran has refused to suspend its nuclear programme as well threatened to disrupt Middle East oil supply if it is approached with further sanctions.
Tamas Varga, an analyst at brokers PVM Oil Associates said: “Iran and the Grexit drove oil prices down during the first half of last week, but developments on both issues have turned them into support for oil prices.” And pointed out: “It doesn’t require a huge understanding of international politics to read Iranian tactics on the nuclear issue, and it was probably naive to think at the beginning of last week that any agreement between Iran and world powers was even remotely possible.”
Some traders believe that one big reason for rising prices is a weaker greenback, which creates dollar cheaper for holders of other currencies and soaring demand, which in turn raise crude prices.
Weakening of the dollar against euro after opinion polls pointed toward a victory for pro-austerity conservatives in Greece’s upcoming general election. Greek pro- bailout conservative party New Democracy is expected to secure most seats on June 17th, 2012 general elections although without an outright majority. After watching new polls, it clears that New Democracy will bag between 23.3 present and 25.8 present of the vote. Therefore, the party will have to look for additional allies to form a viable government.
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