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Originally published Wednesday, April 11, 2012 at 7:56 AM

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Oil rises above $103 ahead of Iran nuclear talks

Oil prices rose above $103 a barrel Thursday in Asia as traders looked to negotiations this weekend over Iran's nuclear program.

Associated Press

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Oil prices rose above $103 a barrel Thursday in Asia as traders looked to negotiations this weekend over Iran's nuclear program.

Benchmark oil for May delivery was up 42 cents to $103.12 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.68 to settle at $102.70 in New York on Wednesday.

Brent crude for May delivery was up 30 cents at $120.48 per barrel in London.

Crude has jumped from $75 in October as investors worried a military attack by Israel or the U.S. on Iran's nuclear facilities could disrupt global crude supplies. However, oil has slid from $110 last month amid optimism meetings between Iran and the U.S., France, Britain, Russia, China and Germany that begin Saturday in Turkey could ease tensions.

"If negotiations were to succeed and some acceptable compromise achieved, the energy markets would breathe a collective sigh of relief and prices would decline," said Richard Soultanian of NUS Consulting. Soultanian estimated concern that Iran's crude exports will be cut by a military conflict or tighter sanctions has added about $15 to the price of oil.

Analysts are most concerned that Iran, OPEC's second-largest oil producer, will fail to compromise on its nuclear operations and Israel will launch a pre-emptive attack against them. Bank of America Merrill Lynch estimated a major supply disruption of Iranian crude would push Brent crude up by as much as $40.

"A conflict between Israel and Iran could have severe consequences for global oil production and distribution," Bank of America Merrill Lynch said in a report. "A sustained rise in oil above $150 would likely push the U.S. into recession."

China's first quarter economic growth figures, due Friday, are also expected to provide a cue for the oil market as the country is a major consumer of fuel.

In other energy trading, heating oil was up 0.5 cent at $3.12 per gallon and gasoline futures added 0.4 cent at $3.30 per gallon. Natural gas fell 0.2 cent at $1.98 per 1,000 cubic feet.

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