Oil rebounds on Iran uncertainty

Geo-political factors weigh on the minds of oil traders

Oil prices rebounded on Monday from two-month lows as concerns reignited over Iran's nuclear programme.

Iran has said it will not suspend uranium enrichment, a key demand of an international proposal aimed at resolving the nuclear program row.

It is the Opec cartel's number two oil producer and analysts fear it could halt exports if the dispute worsens.

Brent crude climbed $1.12 to close at $73.42 a barrel while US light, sweet crude settled $1.31 higher at $72.45.

Concerns are growing, too, over violence in the oil-rich Niger Delta, which is reducing supplies.

There are also worries that hurricanes could hit oilfields in the Gulf of Mexico, bringing disruption to supply there.

Negotiations

Iran's comments came two days before Iran was due to respond to a proposal by Russia, China, France, Britain, Germany and the US, aimed at resolving the nuclear row.

Iran's foreign ministry said a final decision would be based on negotiations.

But he warned that a halt to uranium enrichment was "not on the agenda".

The ceasefire in Lebanon and healthy US stockpiles had calmed oil markets last week, with BP's decision to continue oil production from parts of its Prudhoe Bay field in Alaska also triggering a downward movement in price.

Oil hit a record high of $78.40 on 14 July after fighting broke out in Lebanon.