Oil futures were little changed around $90 a barrel Friday, as traders paused following an inconclusive meeting between Iran and world powers over the country's nuclear program.
Light, sweet crude for July delivery rose 4 cents to $90.70 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe rose 16 cents, or 0.2%, to $106.71 a barrel. Trading volumes were thin ahead of the three-day Memorial Day holiday in the U.S.
The European Union said Friday it will press ahead with an embargo on Iranian oil starting July 1, as planned, after two days of talks with Tehran in Baghdad failed to produce an agreement over the country's nuclear enrichment program.
Iran has faced increasingly stringent sanctions over its nuclear program, which Western countries fear is aimed at developing a nuclear weapon. The escalating tensions were a major factor behind oil's rise earlier this year to nearly $110 a barrel, although prices have cooled off considerably since diplomacy began.
"You just have to be on guard for volatility because liquidity is low," said Stephen Schork, president of The Schork Group, a trading advisory firm. "You've got the Iranian stuff out there, so you do run a risk" of a price move.
A fresh round of talks between Iran, Russia, the U.S., China, the U.K. and France is due in Moscow on June 18-19 in what will be the latest round of talks after negotiations in Istanbul and later Baghdad failed to produce a breakthrough.
Still, oil prices have fallen sharply in recent weeks as continued diplomacy eases fears that a major oil supply disruption, such as military conflict or a blockade of the Strait of Hormuz, will strike the market anytime soon.
"The negotiating process is...not dead yet," said Olivier Jakob, president of Petromatrix, a Swiss consultancy.
Meanwhile, uncertainty over whether Greece will remain in the euro zone has also shaken the oil market. Traders fear that a Greek exit will destabilize the currency union, ultimately denting economic growth and oil demand.
Benchmark crude on the Nymex has fallen 17% from a high of $109.77 a barrel reached in February.
However, some positive news emerged from Europe overnight. Upbeat consumer-confidence data from Germany and France buoyed European equities, helping lift oil prices during European trading hours.
Front-month June reformulated gasoline blendstock, or RBOB, recently traded 0.57 cent, or 0.2%, lower at $2.8708 a gallon. June heating oil traded 0.25 cent, or 0.1%, higher at $2.8244 a gallon.
-By Dan Strumpf, Dow Jones Newswires; 212-416-2818; email@example.com