Brent Steady Above $108 With Iran In Focus

Brent crude oil dipped lower on Thursday as tensions in the Middle East eased further on comments from Iran's president which indicated he was open to repairing the nation's relationship with the West. The commodity traded steadily at $108.85 at 7:05 GMT on Friday morning.

Iranian President Hassan Rouhani made statements on Thursday which many think could be a turning point for diplomatic relationships between Iran and the West. According to Reuters, he said that Iran was not interested in war and was not working to develop nuclear weapons as is feared by Western diplomats. He also expressed interest in negotiating a deal with the US on Tehran's nuclear development program.

The ongoing conflict over Tehran's uranium enrichment plans have created a tense relationship between the US and Iran and kept oil prices elevated. In order to cut funding to the program, the West slapped Iran with sanctions which have depressed the country's oil exports and taken supply from the market. Rouhani's remarks could be the beginning of negotiations between the two sides that ultimately lead to the elimination of those sanctions.

Brent prices were also pressured by increased supply from Libya, where labor strikes cut oil exports by more than half over the past month. Labor protests closed most of the African nation's largest export terminals, but the Libyan government has been working to resolve the issues and several of the oilfields have reopened.

Optimism about the West's future with Iran coupled with the resumption of Libyan oil exports capped gains from the Fed's decision to continue with its stimulus plan. The US central bank announced on Wednesday that it would not taper its $85 billion bond buying plan as most were expecting. The news sent commodities soaring, but Brent was held back by rising supply prospects.

BY Laura Brodbeck