Brent crude fell, extending last week’s drop, after the first international talks in 15 months on Iran’s nuclear program yielded an agreement to reconvene in May.
Futures slipped as much as 1.3 percent in London. The United Nations’ five permanent Security Council members plus Germany will meet Iranian delegates in Baghdad on May 23 after “constructive” talks in Istanbul on April 14, the European Union’s foreign policy chief said yesterday. Oil rose this year amid concern that tension with Iran may disrupt global supply.
“It’s definitely a step forward that the parties are at least talking again,” said Thorbjorn Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark. “There is a significant risk premium in prices related to Iran, and even small steps towards a solution can have large impacts.”
Brent oil for June settlement dropped as much as $1.62 to $119.59 a barrel on the ICE Futures Europe exchange and was at $120.06 as of 11:13 a.m. local time. Futures fell in four of the past five weeks.