Oil rises slightly

Oil prices rose slightly on Friday after tension around Iran's nuclear program and improving consumer sentiment outweighed poor US economic indicators. US crude futures settled at $66.02, up 13 cents. In London, Brent crude settled at $65.11 a barrel, up 29 cents. Oil prices climbed after US President Barack Obama accused Opec member Iran of building a secret nuclear fuel plant and demanded Tehran immediately halt what he called a "direct challenge" to the international community.
In recent years, tensions over Tehran's nuclear program have supported oil prices, but analysts said that large amounts of spare oil production capacity helped ease concerns over supply. "I think the risk of geopolitical supply shock is muted somewhat by Opec spare capacity being higher and US commercial inventories being at a high level. But that being said, if you have a situation that affects the supply chain, all bets are off," said Rachel Ziemba, lead energy analyst at RGE Monitor in New York.
In late 2008, Iran threatened to block the Strait of Hormuz, the sea route through which approximately 40 percent of the world's globally traded oil passes, when tensions escalated in another row with the United States around the nuclear program. A Reuters/University of Michigan survey showing that US consumer sentiment rose in late September was also supportive to oil prices.
But some gloomy economic news added to concerns about an oil demand recovery in the world's top consumer and tempered price gains. Oil had fallen by about $6 in the past two trading sessions after government figures on Wednesday showed crude and fuel inventories in the United States had risen again, suggesting oil demand was still weak.
Oil prices have been trapped in a range of between $65 and $75 for about two months. A lack of significant developments in fundamentals of supply and demand, which have remained slack all year, has forced investors to seek direction from technical chart analysis, equities and foreign exchange markets. In a research note published on Friday, Goldman Sachs said range-bound trading reflected "the end of a recession" and maintained its oil price forecasts, but raised its forecast for global oil demand.