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NEW YORK - Oil fell more than 4 per cent today, extending declines that followed Iran's release last week of 15 British sailors and marines.
The release last week of the British sailors and marines eased simmering tensions between the West and Iran, the world's fourth-biggest oil exporter.
The two-week detention of the UK military personnel had driven US crude oil prices briefly above US$68 a barrel, their highest level since September last year.
US crude CLc1 settled down US$2.77 to US$61.51 a barrel. London Brent crude LCOc1 settled down US$1.65 at US$66.59 a barrel, in trade subdued by the Easter holiday.
Brent maintained a premium of nearly US$5 over US crude partly due to relatively high supplies of US crude at the key Cushing, Oklahoma supply hub.
But concerns about Iran's uranium enrichment programme, as well as the conflict in Iraq, still underpin oil prices, which are well above this year's lows of US$49.90 a barrel in January.
"'Iranium' remains a hot issue and, as importantly, the lack of an Iraqi solution will continue to haunt the Middle East for months to come," said Olivier Jakob, from oil industry consultancy Petromatrix.
The energy markets are also keenly eyeing US petrol supplies leading into the summer driving season. Stockpiles of the key motor fuel have dropped nearly 10 per cent since early February amid refinery outages.
"There are fears of a tight US petrol market over the summer," said Christopher Bellew, senior vice president at Bache Commodities.
URANIUM ENRICHMENT
Iran President Mahmoud Ahmadinejad announced today his country has begun the first stage of what it calls "industrial scale" uranium enrichment, which the West fears could be used to make nuclear weapons.
Tehran has rejected United Nations demands to halt enrichment, instead pressing ahead with a nuclear programme it calls peaceful.
Members of the Organisation of the Petroleum Exporting Countries (Opec) insist the global oil market is well-supplied and high prices reflect tensions over Iran rather than any shortage.
Iran's oil minister, Kazem Vaziri-Hamaneh, said 1.7 million barrels per day in oil supply cuts that Opec agreed to last year had balanced the market.
"After the Opec decisions to cut, which have been fairly well implemented, we see stability in the market," he said on the sidelines of a gas meeting in Qatar, attended by seven of Opec's 12 members.
- REUTERS
