Oil steadies above $134 after slump
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By Santosh MenonLONDON (Reuters) - Oil held above $134 a barrel on Thursday, after an initial fall that seemed like a continuation of its recent tumble on mounting evidence of fading demand in the United States and easing tensions between the U.S. and Iran.A fresh attack on an oil pipeline in Nigeria, the world's eighth-biggest oil exporter, shut 20,000 barrels per day of crude oil production, underscoring the risk to supplies.U.S. crude futures were 10 cents lower at $134.50 a barrel at 9 a.m. EDT, off lows of $133.02.It slid $4.14 on Wednesday, taking the drop from last Friday's all-time peak of $147.27 to around $13.London Brent crude for September also shed 11 cents to $135.70 a barrel."Poor consumer demand and recovering OPEC supply may finally be showing up in the numbers, setting the stage for an extended price retreat," said Antoine Halff, deputy head of research, Americas, at Newedge USA in New York.Dealers said Wednesday's losses were triggered by a 3-million barrel increase in U.S. crude stocks, according to data from the Energy Information Administration.Gasoline and distillate inventories also rose."Besides the increase in crude, gasoline, and distillate stocks, it's interesting to note that demand in the United States remains relatively weak as well," said David Moore, analyst at Commonwealth Bank of Australia.The widely-watched government report showed U.S. oil products demand running at 2.0 percent below year-ago levels, another sign that soaring prices are cutting into consumer demand for fuel.Adding to pressure on oil prices, a senior U.S. official said on Tuesday the United States planned to send an envoy for talks this weekend between Iran and major powers over Tehran's nuclear program."It doesn't help support prices that Washington, for all its belligerent rhetoric towards Iran, is in fact giving signs that it is turning away from the military option and increasingly resorting to a policy of engagement with Tehran," Newedge's Halff said.Washington had said it would not be involved in any pre-negotiations with Iran unless it gave up nuclear enrichment. The standoff between the Islamic Republic and the West has helped boost oil prices.(Additional reporting by Luke Pachymuthu in Singapore and Gene Ramos in New York; editing by James Jukwey) (c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
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