WASHINGTON-- Oil prices fell yesterday after Iran's top nuclear negotiator cited "positive steps" in a package of incentives offered by world powers to curb its nuclear program.
The mood on energy markets has seesawed in recent weeks with each diplomatic development among Iran, the United Nations, and the United States over Tehran's nuclear ambitions. The main fear is that Iran could disrupt oil supplies if provoked by sanctions or some other punishment.
US Energy Secretary Samuel Bodman said if Iran were to disrupt Persian Gulf oil supplies, the US government would be willing to tap its emergency oil reserve.
Speaking on state television after receiving the latest proposal from EU foreign policy chief Javier Solana, Iranian nuclear negotiator Ali Larijani called the talks ``constructive" and said Iran would respond after studying the incentives. ``The proposals contain positive steps and also some ambiguities," Larijani said.
After dropping as low as $71.35, light sweet crude for July delivery on the New York Mercantile Exchange settled 10 cents lower at $72.50 a barrel.
Oil prices have traded slightly above and below $70 a barrel for a month now amid mixed signs on US gasoline consumption, nervousness about the Gulf of Mexico hurricane season, and unease about the Iranian dispute, the war in Iraq, and violence in oil-rich Nigeria.