Signal Oil and Gas - Oil prices were steady Wednesday after moving back from an overnight trading record near $127 a barrel on concerns that Iran may cut production.
Iranian officials denied production cuts were imminent but acknowledged they had been discussed.

Light, sweet crude for June delivery dropped 5 cents to $125.75 a barrel in electronic trade on the New York Mercantile Exchange by noon in Europe. Oil prices hit a trading record of $126.98 a barrel Tuesday before settling at $125.80.

Analysts said traders reacted quickly overnight to the news that Iran's government was considering cutting crude oil production.

But James Cordier, president of Tampa, Florida-based trading firms Liberty Trading Group and OptionSellers.com, said he doubts Iran will actually cut production.

"They need all the petrodollars they can get," because the nation's economy is in bad shape, he said.

In sending crude prices higher Tuesday, investors shrugged off gains in the dollar. A stronger dollar often prompts selling by investors who had bought commodities such as oil as a hedge against inflation. Also, a stronger dollar makes oil more expensive for investors overseas. SIgnal Oil and gas

Meanwhile, the International Energy Agency, an adviser to mostly western, industrialized nations, said high prices are cutting demand for oil and petroleum products in the U.S. and Europe. The IEA cut its global oil demand growth forecast for this year to 1.2 percent from 1.5 percent. In the U.S., the IEA said demand for oil may contract by as much as 2.1 percent this year, while demand for gasoline will drop by about 1 percent.

1  out of 1 found this valuable. Do you find this valuable? Do you?