Oil prices fall on news about Iran, supplies in U.S.

| 5/31/2006

Oil prices fell in midday trading Wednesday, May 31, thanks to news that the U.S. was willing to talk with Iran and expectations of increased oil supplies in the U.S.

Light, sweet crude fell to $70.20 per barrel in midday trading on the New York Mercantile Exchange, down from a high above $72 per barrel.

Forbes reported that the drop coincided with the news that U.S. Secretary of State Condoleezza Rice had made an offer to speak with Iranian officials in what would be the first substantive diplomatic talks between the two nations since relations were broken off 26 years ago.

Further adding to the drop were expectations that U.S. fuel stocks would be up when the Department of Energy issues its weekly report on Thursday, June 1.

Another contributing factor, Forbes reported, was the assurance from the Organization of Petroleum Exporting Countries that it would keep producing oil at full capacity. OPEC is expected to announce its decision after its meeting on June 1 in Caracas.