SINGAPORE, AP – Oil prices dropped slightly Wednesday as traders locked in profits in response to Iran’s offer to continue negotiations on its nuclear program.
Traders also awaited the weekly U.S. inventory report, which was expected to show relatively small gasoline stock draws for this time of year, the prime American driving season.
Light, sweet crude for October delivery was down 18 cents to $72.92 a barrel in Asian electronic trading on the New York Mercantile Exchange. The September contract, which closed Tuesday, settled at $72.63 a barrel, up 18 cents.
October Brent crude on London’s ICE futures exchange dropped 17 cents to $73.07 a barrel.
In other Nymex trading, natural gas futures rose 2.2 cents to $7.030 per 1,000 cubic feet. Gasoline futures dropped 0.93 cent to US $1.9300 per gallon, while heating oil futures fell 0.21 cent to $ 2.0345 per gallon.
The face-off between Iran, OPEC’s No. 2 oil producer, and the West has worried traders for months. The U.N. Security Council passed a resolution last month calling for Iran to suspend uranium enrichment — which could be used to create nuclear weapons — by Aug. 31 or face the threat of economic and diplomatic sanctions. That has clouded the outlook for Iran’s oil supplies.
In its official response to a package of incentives aimed at persuading Iran to suspend uranium enrichment, Tehran said Tuesday it was ready for “serious negotiations” on its nuclear program.
But a semiofficial news agency said the government was unwilling to abandon uranium enrichment — the key U.S. demand — and Iran’s Supreme Leader Ayatollah Ali Khamenei had said Monday that Tehran will pursue nuclear technology.
“It seems the country has rejected (the incentives package), and this is as expected,” said Koichi Murakami, an analyst with brokerage Daiichi Shohin in Tokyo. “Given that, traders are locking in profits.”
In the weekly oil data from the U.S. Department of Energy, due out later Wednesday, crude oil and gasoline stockpiles are both expected to fall, according to a Dow Jones Newswires survey of analysts. The average drop expected in crude oil inventories was 1.1 million barrels.
The market is also concerned that hurricanes could strike Gulf of Mexico production and refining facilities.