Oil edged below $125 a barrel on Monday, pressured slightly by evidence of rising Organisation of the Petroleum Exporting Countries (Opec) output, but supported by worries about supply disruption as a tropical storm threatened facilities in the Gulf of Mexico.
Concerns about Opec producer Iran’s nuclear programme also underpinned the market.
United States light crude was trading 20 cents lower at $124,90 by 11.12am GMT, while London Brent crude rose by 14 cents to $124,32.
Prices have recovered from a low hit last week of $120,42, the weakest since early May and far below the record of $147,27 struck on July 11.
They reached a session high of $126,35 early on Monday before easing slightly after a Reuters survey showed Opec supply had risen for a third consecutive month in July mainly because of increased output from the world’s top exporter, Saudi Arabia.
The modestly bearish impact was countered by Tropical Storm Edouard, which formed near a major oil- and gas-producing area of the northern Gulf of Mexico on Sunday, the US National Hurricane Centre said.
”The market still looks firm, although it is down from highs,” a broker said. ”Iran and Edouard are the main points to keep an eye on.”
The storm is expected to come ashore at close to hurricane strength in a few days on the Texas coast.
Oil firms, including Royal Dutch Shell and ExxonMobil Corp, said on Sunday production was unaffected so far, but they were preparing for possible evacuations of workers and temporary output shutdowns.
Traders were also nervous supplies could be disrupted as a result of tension between the West and the world’s fourth-largest oil producer, Iran.
Iran and the representatives of six world powers talked by telephone on Monday about Tehran’s disputed nuclear programme, but the Islamic Republic said it would press ahead in spite of a demand to halt the work.
Tehran failed to meet Saturday’s informal deadline to respond to a package of incentives offered by the six powers.
Oil supplies have already been disrupted from Nigeria, the world’s eighth-largest oil exporter, as a result of militant attacks that have cut about one-fifth of its production.
Gunmen kidnapped two French expatriates near the country’s oil-industry hub of Port Harcourt in the restive Niger delta, military and security sources said on Sunday. — Reuters