NEW YORK (Reuters) - Brent crude edged up on Tuesday, bouncing from a 17-month low, supported along with U.S. crude by deadlocked talks to defuse the dispute over Iran’s nuclear program and hopes for more monetary stimulus to spur economic growth.
Brent fell sharply before Spain managed to sell debt at its latest auction, then steadied even though the country’s borrowing costs soared and the threat of a spreading debt crisis continues as Greek political parties try to form a government.
U.S. crude bounced after finding support again near the $82 a barrel level, also helped by rising equities on Wall Street. .N
Iran and six world powers blamed each other for deadlock at talks on Tehran’s nuclear program as negotiators struggled for a breakthrough that will reduce the risk of a new Middle East war.
“The market has rebounded on worries about the outcome of the nuclear talks in Moscow and a general rebound in the risk sentiment,” Thorbjorn bak Jensen, oil analyst with Global Risk Management, said.
The U.S. Federal Reserve’s Federal Open Market Committee will release a policy statement on Wednesday at the end of a two-day meeting and there remains some hope that the Fed will unveil some form of additional stimulus to support a flagging recovery.
Brent August crude edged up 25 cents to $96.30 a barrel by 11:45 a.m. EDT (1545 GMT), after falling to $94.44, the lowest intraday price since January 10, 2011.
U.S. July crude was up 78 cents at $84.05, having traded from $82.28 to $84.41 ahead of the July contract’s expiration on Wednesday.
U.S. August crude was up 83 cents at $84.43 a barrel.
Brent’s premium to U.S. crude slipped and hovered near $11.80 based on August crude prices. The $11.63 low was the weakest the premium has been since the end of January.
The narrowing spread has been in reaction to the mid-May reversal of the Seaway pipeline allowing crude oil to be brought from the Cushing, Oklahoma. storage hub to the refinery rich U.S. Gulf Coast.
Enbridge Inc (ENB.TO) said late on Monday that it expects to complete an expansion of the newly reversed pipeline by the end of the year.
Additional reporting by Gene Ramos in New York, Ikuko Kurahone in London and Luke Pachymuthu in Singapore; Editing by Alden Bentley