TOKYO (Reuters) – Oil held firm above $73 on Tuesday as strong demand from China and renewed worries over Iran’s nuclear ambitions halted profit-taking from last week’s record highs.
U.S. June light crude futures were trading 9 cents higher $73.42 a barrel by 0847 GMT, after sliding $1.84 on Monday to take the market down from a $75.35 record. London Brent crude traded 23 cents up at $73.23.
Prices came under pressure earlier in the session after the Organization of the Petroleum Exporting Countries pledged to keep pumping at near maximum rates, with a daily production ceiling of 28 million barrels, at talks by ministers in Doha on Monday.
But U.S. crude prices trimmed losses as official Chinese customs data showed that crude imports into the world’s second-largest oil consumer rose 10.9 percent in March from a year earlier, leaving first-quarter imports up 25 percent. ()
China’s apparent oil demand climbed 6 percent in March from a year earlier, the strongest rise since September in the world’s second-largest oil consumer, Reuters calculations showed, driven by a robust economy and stockpiling ahead of price hikes.
“Risks that have been supporting the market remain unresolved, and China’s strong demand will have impact on the market fundamentals,” said Hiroyuki Kitakata, director of commodities business at Barclays Capital in Tokyo.
A U.S. envoy to the International Atomic Energy Agency (IAEA) said on Tuesday a key report due on Friday by U.N. nuclear chief Mohamed ElBaradei on Iran’s co-operation with U.N. Security Council demands that it suspend uranium enrichment will be negative.
Iran’s chief nuclear negotiator had said earlier on Tuesday it would suspend relations with the U.N. nuclear body if sanctions were imposed, a step the United States is pushing for, though China said it still saw room for a negotiated settlement.
OPEC ministers said on Monday that geopolitical tensions in Iran, Nigeria and other key oil-producing nations have added as much as $15 to the price of oil and that the cartel, the source of a third of global oil, was powerless to pull down high oil.
Oil prices have risen about 20 percent since the start of the year as investment funds are shifting money into the market.
Iranian Oil Minister Kazem Vaziri sought to calm fears at the weekend by reiterating that the oil weapon was off the table. Western powers fear Iran wants to build an atomic bomb, though Tehran says it is only seeking nuclear power.
Iran’s foreign ministry said its decision to enrich uranium was irreversible, despite the threat of sanctions or military action.
The market remained concerned over U.S. gasoline supply in summer after fuel regulation changes, traders said.
Analysts forecast U.S. government weekly data on Wednesday will show a drop in gasoline stocks in the United States for the eighth consecutive week as demand rose, while refineries continued to drain their tanks of MTBE-laced gasoline to make way for product with ethanol.