LONDON (Reuters) -Oil steadied above $64 on Thursday as bargain hunters stepped in after a month-long rout and found some support in a renewed U.S. push for immediate sanctions on Iran, the world’s fourth biggest crude exporter.
Markets were reeling after a sharp price drop sparked by swelling stockpiles, easing jitters over potential supply disruptions from Iran and a mild Atlantic storm season.
U.S. crude was up 45 cents at $64.42 a barrel by 1023 GMT after rising 21 cents on Wednesday, snapping a 12 percent, seven-session slide, its longest losing streak in three years.
London Brent was up 41 cents at $63.40, having dropped to a $62.62 low on Wednesday — more than a $16 fall from its August 8 record high and the steepest retreat since the 1991 Gulf War.
“I would view the current price rally as more of a recoil than anything else,” said Tobin Gorey, a commodities strategist with Commonwealth Bank of Australia.
“The possibility remains that the Iran issue could flare up again but I think the market has downgraded its premium pretty well overall.”
A U.S. official said on Wednesday that Iran should face sanctions now because it was “aggressively” pursuing atom bombs, but European Union allies said it was not too late for talks.
Iranian President Mahmoud Ahmadinejad offered an olive branch, saying he was open to “new conditions” and that a row over his country’s atomic work could be settled by negotiations.
Markets were soothed when tanker loadings resumed at Nigeria’s Brass export terminal overnight after a brief break due to a strike by oil unions, ship agents said on Thursday.
A three-day strike over insecurity in the Niger Delta began on Wednesday, but is expected to be called off later on Thursday after talks with the government.
Underlining the view that supplies were robust, a spate of refinery run cuts across Asia deepened on Thursday.
Oil dealers were debating whether price gains were a short-term bounce or a resumption of a four-year rally fueled by robust economic growth.
The International Monetary Fund says said on Thursday the economic outlook was even stronger for next year. In its twice-yearly World Economic Outlook, the IMF raised its 2007 global growth forecast to 4.9 percent from 4.7 percent.