London Brent crude in fragile recovery after fall

By Staff
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Google Oneindia News

LONDON, Feb 20 (Reuters) London Brent crude staged a fragile recovery on Tuesday but remained locked in a - a barrel range that has defined the market for past three weeks.

Heating oil demand in top consumer the United States is likely to ease over the next weeks as the northern winter reaches an end, acting as a drag on prices.

But with the world's fourth biggest exporter Iran apparently on a collision course with the United Nations over its nuclear programme, few analysts expect a major sell-off.

Tensions are also on the rise in Africa's biggest producer Nigeria ahead of elections in April. A fifth of the country's output is already closed because of militant attacks.

At 0956 GMT Brent was up seven cents at .21.

The trading floor of the New York Mercantile Exchange (NYMEX) was closed for the Presidents' Day holiday. U.S. crude traded at .60 on the Globex electronic platform, 79 cents lower than Friday's closing price.

''The bullish advance spurred by refinery disruptions and Iranian jitters will go up against the release of another unpredictable set of U.S. oil inventory numbers on Thursday, a warming trend for large parts of the U.S. northeast by mid-week and the March WTI expiry,'' said Edward Meir of Man Energy.

The March contract for U.S. crude expires later on Tuesday and this is sometimes a trigger for large price swings.

''The cold in the U.S. Northeast, which had been supporting prices, is looking to ease this week,'' agreed Ken Hasegawa, manager at commodities futures broker Himawari CX in Tokyo.

Energy demand in the U.S. Northeast, the world's biggest heating oil market, will be near to below normal for the rest of this week, forecaster DTN Meteorlogix said on Monday.

And temperatures will remain warmer than usual in most of the United States through March, capping an overall mild winter, private forecaster WSI Corp. said. [nN19773960] Iran continues to hang over markets.

The United Nations' nuclear watchdog, the International Energy Agency, is due to issue a report on Wednesday on Iran's compliance with a U.N. Security Council demand that it halt nuclear fuel work such as uranium enrichment.

On Tuesday Iran's security council chief, Ali Larijani, will meet IAEA director Mohamed ElBaradei, whose report to the Security Council is expected to confirm that Tehran has defied a 60-day council deadline to stop such work.

Oil traders fear further sanctions could prompt Tehran to curb or cut its own oil exports, or attempt to disrupt Gulf shipments through the Strait of Hormuz, through which an estimated one-fifth of the world's crude travels.

REUTERS CS PM1603

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