* Iran nuclear talks set in Istanbul on Saturday
* U.S. March jobs report disappoints, pressures oil
* Coming up: Fed Chairman Bernanke speaks at 2315 GMT
By Robert Gibbons
NEW YORK, April 9 (Reuters) – Oil prices fell in light
volume on Monday as revived talks on Iran’s nuclear program
eased fears of supply disruption and on ideas slowing U.S. jobs
growth may lessen demand for fuel.
Negotiations between Iran and world powers over Tehran’s
disputed nuclear program will be held on April 14 in Istanbul.
The resumption of talks, which collapsed more than a year ago,
tempered worries about an immediate cut in supply or conflict.
After being closed on Good Friday, oil markets and Wall
Street on Monday reacted to Friday’s U.S. nonfarm payrolls
report that showed job growth slowed to 120,000, well below
expectations and the smallest increase since October.
Brent May crude fell 73 cents to $122.70 a barrel by
2:51 p.m. EDT (1851 GMT), having dropped as low as $121.02 and
tested below the 50-day moving average of $121.60.
U.S. May crude lost 85 cents to settle at $102.46 a
barrel, after testing below the 100-day moving average of
$101.61 and recovering from a low of $100.81.
U.S. RBOB gasoline futures slumped more than 4 cents,
pressured by the bearish employment data. Heating oil futures
declined by more than 2 cents.
Brent’s premium to U.S. crude was little
changed, hovering above $20 a barrel.
Lackluster trading was evident with some investors still on
holiday. Total Brent and U.S. crude turnover, as well as volumes
for U.S. RBOB gasoline and heating oil, were well below their
30-day averages.
“If there are some good vibrations from the Iranian talks,
and they don’t immediately break down, the markets will have
hopes that the European Union may lighten the sanctions on Iran,
at least on the insurance front,” said Olivier Jakob from
Petromatrix.
“At the moment, the sanctions are having a much stronger
impact than anticipated, mostly through insurance, which could
lead to a full interruption of Iranian oil flows,” he added.
Tehran’s ability to continue exporting oil is being hampered
as maritime insurance companies around the world walk away from
covering tankers carrying Iranian oil.
U.S. EMPLOYMENT GROWTH SLOWS
The U.S. nonfarm payrolls report released on Friday tempered
recent optimism about the pace of economic expansion and the
ability of the United States to bolster growth at a time when
the euro zone is hampered by debt problems and China faces a
slowdown.
U.S. stocks fell but pulled off their lows after the S&P; 500
hit its lowest point in more than three weeks and the Dow Jones
industrials index dipped below its 50-day average for the first
time since Dec. 20. ]
The slowdown in U.S. jobs growth bolstered expectations that
the Federal Reserve could be spurred to ease monetary policy
further.
“The disappointing jobs growth, while weighing on oil
prices, may open the door for quantitative easing 3 and that
would be supportive to oil,” said Phil Flynn, an analyst at
PFGBest Research in Chicago.
Investors awaited Federal Reserve Chairman Ben Bernanke’s
speech, scheduled for 7:15 p.m. EDT (2315 GMT) on Monday at a
conference hosted by the Federal Reserve Bank of Atlanta, for
any indications about policy direction.
China’s annual inflation rate jumped more than expected in
March, but expectations that a cooling economy has eclipsed
inflation as the government’s pressing near-term worry were
reinforced by surprisingly soft producer prices.
Maintenance and refiners’ losses despite a recent fuel price
hike will cause Chinese oil firms to trim crude oil throughput
at major refineries to a 35-month low in April after a large cut
in March, a Reuters poll on Monday showed.
IRAN’S DISPUTE OVER NUCLEAR PROGRAM
With another attempt at negotiations on tap this weekend,
getting Iran to suspend high-level uranium enrichment and to
close a nuclear facility built deep under a mountain near the
holy city of Qom were “near-term priorities” for the United
States and its allies, according to a senior U.S. official.
An EU embargo on importing Iranian oil is slated for July,
while the United States is pressing major importers of Iranian
oil in Asia to reduce purchases as well.
