Oil down near $95 on Iran talks

Oil fell to near $95 a barrel Friday as investors waited to see if Iran will get sanction relief in exchange for curbing its nuclear programme.

Benchmark US crude for January delivery was down 20 cents to US$95.24 at mid-afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract gained US$1.59 to close at US$95.44 on Thursday, the highest close this month.

Oil was buoyed by signs of recovery in the US job market but the gains were short-lived as focus returned to the Iran nuclear talks which began in Geneva on Wednesday.

Negotiators were trying to fine-tune a draft agreement that would limit Tehran's atomic program in an initial deal. In exchange, the US, Britain, France, Russia, China and Germany are offering a gradual easing of sanctions that have crippled Iran's economy, raising the possibility of an influx of Iranian oil into world markets at a time of already abundant supplies.

A senior US official has told reporters that Iran is losing US$5 billion a month in oil sales alone and US$120 billion in total from all sanctions.

The powers insist that the most severe penalties, which are on oil exports and banks, will remain until there is a comprehensive agreement to minimize Iran's nuclear arms-making capacity. Iran says it does not want such weapons and has indicated it's ready to start rolling back its programme but wants greater and faster sanctions relief than that being offered.

Brent crude, the benchmark for an international variety of crude, fell 7 cents to US$110.01 a barrel on the ICE futures exchange in London.

In other energy futures trading on Nymex: 
— Wholesale gasoline eased 0.9 cent to US$2.71 gallon. 
— Heating oil shed 0.6 cent to US$3 a gallon. 
— Natural gas was up 1.6 cents at US$3.718 per 1,000 cubic feet.