Oil prices rise as US, Israel meet on Iran

March 06, 2012 | 08:41

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Oil prices ended slightly higher Monday as the leaders of US and Israel projected solidarity in Washington talks on confronting Iran but took care not to escalate tensions.

Oil prices ended slightly higher Monday as the leaders of US and Israel projected solidarity in Washington talks on confronting Iran but took care not to escalate tensions

But a bearish revision of growth expectations in China also kept a cap on prices.

New York's main contract, light sweet crude for delivery in April, rose two cents from Friday's close to $106.72 a barrel.

Brent North Sea crude for April meanwhile rose 15 cents to $123.80 a barrel in London trade.

US President Barack Obama and Israeli Prime Minister Benjamin Netanyahu met to discuss how to respond to Tehran's alleged nuclear weapons program, amid US concerns that Israel was moving toward a unilateral strike to disable Iranian nuclear facilities.

While Netanyahu declared that "Israel must have the ability always to defend itself, by itself, against any threat," the two leaders kept a lid on any inflammatory talk.

Obama stressed that "there is still a window that allows for a diplomatic resolution" that could avoid a military showdown that might have dangerous implications for the oil market.

China's estimation that growth will only hit 7.5 per cent this year -- its lowest forecast in eight years -- also dampened sentiment, but it was not enough to sink prices.

"While slower economic growth in China and across Europe lowers demand expectations, there are still concerns over supply," said Fawad Razaqzada, an analyst for traders GFT Markets.

Meanwhile Iraq said its oil production had topped three million barrels a day, the country's highest output since 1979.

Oil Minister Abdelkarim al-Luaybi told AFP Iraq plans to increase production and exports this year to 3.4 million bpd and 2.6 million bpd, respectively.

AFP

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