Crude oil rises $2 on Spain rescue, Iran

Crude oil rises $2 on Spain rescue, Iran

UN nuclear watchdog, Iran fail to reach deal on probe; Eurozone agrees to lend Spain up to 100 billion euros

June 11, 2012 10:22 by Reuters

Crude oil futures rose $2 in early Asian trading on Monday after euro zone finance ministers agreed to a rescue package of up to 100 billion euros ($125 billion) for Spain’s banks and after talks between the United Nations and Iran failed.

The rescue package for Spain was larger than expected, calming some of the fears in financial markets over Europe’s debt crisis. The aid was heralded as a milestone for the region by the Group of Seven developed nations.

Brent rose to as much as $101.59 a barrel and traded $2 higher at $101.47 by 1100 GMT, while U.S. crude increased to as much as $86.15, and was $1.93 higher at $86.03.

The aid package helped oil prices reverse Friday’s losses. Brent had settled 46 cents lower at $99.47 a barrel on Friday, sliding for a second day. U.S. crude had slipped 72 cents.

IRAN TALKS FAIL

The U.N. nuclear watchdog and Iran failed at talks on Friday to unblock a probe into suspected atom bomb research by the Islamic state, reviving concerns over supply disruption and dimming any chances for success in negotiations between Tehran and major powers later this month.

The International Atomic Energy Agency, using unusually pointed language, said no progress had been made in the meeting aimed at sealing a deal on resuming the IAEA’s long-stalled investigation, and it described the outcome as “disappointing.”

It came just a few weeks after U.N. nuclear chief Yukiya Amano said he had won assurances from senior Iranian officials in Tehran that an agreement would be struck soon.

(Reporting by Manash Goswami; Editing by John Mair)