Oil dips on hopes of easing Iran tensions

Singapore, May 23:

prices edged lower in

today, amid hopes of easing tensions between major producer

and the West, but eurozone debt woes continued cast a shadow over the market.

New York's main contract, West Texas Intermediate crude for delivery in July, was down 60 cents at USD 91.25 per barrel while Brent North Sea crude for July shed 62 cents to USD 107.79 in morning trade.

"Oil has slipped on news that Iran will let UN nuclear inspectors into the country," said Justin Harper, market strategist at IG Markets Singapore.

Dealers are also keeping an eye on the eurozone debt crisis amid worries Greece could exit the 17-member currency bloc, analysts said.

"The crisis in the euro area has become more serious recently, and it remains the most important source of risk to the global economy," OECD chief economist Pier Carlo Padoan said in the organisation's latest report released yesterday.

While the eurozone gained some breathing space at the beginning of the year from the European Central Bank pumping more than trillion euros into banks, tensions soared in recent weeks after inconclusive elections on May 6 raised the spectre of a Greek exit.

Prices were also pressured by a report by industry group American Petroleum Institute (API) indicating weaker demand in the world's biggest oil-consuming economy. The official weekly inventory report by the Energy Information Administration is due later today.

AFP