Iran has been given two weeks to accept an international offer to suspend its nuclear program or face “punitive measures” warned Secretary of State Condoleezza Rice.
While on her way to the United Arab Emirates yesterday, Rice was attempting to increase the pressure on the government in Teheran after sending the number three man in the Department of State, William Burns, to Switzerland last Saturday to meet with the Iranian nuclear negotiator, Said Jalili.
Up until Saturday, Washing had demanded that Iran stop its Uranium Enrichment program before it would sit at the multilateral negotiating table with the Islamic Republic. The meeting in Geneva sent a “very strong message to the Iranians in the sense that they cannot sit idly by and have to make a decision,” Rice was quoted as saying in Abu Dhabi. She added, “We will see what Iran does in the next two weeks, but I think that the Diplomatic process has rekindled.”
Jalili and Spaniard Javier Solana, chief of Diplomacy for the European Union qualified their conversations as “constructive.” However, Solana lamented that Teheran had not given a definitive response to the incentives offered by international powers for the Iranian Republic to stop its nuclear program.
Solana gave Iran two weeks to respond to the offer by the powers involved in the negotiations including The United States, Russia, China, France, Great Britain and Germany.
The six powers offered Iran a period of negotiation during which time Teheran would commit itself not to use its centrifuges to enrich Uranium. In exchange, the international community would hold off in adopting new sanctions, according to sources.
When the financial markets first got wind of this, the price of oil went up over $131 per barrel. There was also fear that Tropical Storm Dolly would threaten supplies. However, it was later learned that Dolly would wasn’t a like threat, knocking out one more reason traders had to prop up prices. Instead of going up, there was a general sell off, which came as the dollar strengthened and the existing futures contract was set to expire, was a throwback to last week’s sharp declines and dragged crude to its lowest level since early June.
Light, sweet crude for August delivery fell $3.84 to $127.20 a barrel on the New York Mercantile Exchange. Earlier, the contract dropped as low as $125.63. It was crude’s fourth decline in the last five sessions.
The declines offered further evidence that investors, who only a week and a half ago drove prices to a new high above $147 a barrel, are now quickly pulling money out of the market.
“This is more of the long exit from the market by the hedge funds,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. “A lot of these investors who have been supporting prices are hitting the road.”
There are also new indications that high oil prices are killing off demand, especially in the U.S., the world’s largest oil consumer.
In its weekly pump spending survey, MasterCard found U.S. gasoline demand dropped last week for the thirteenth week in a row. Demand fell 3.3 percent compared with the same week a year earlier, according to the survey. Since the start of 2008, gasoline demand is down 2.2 percent.
However, TicosLand read in La Nacion today that RECOPE is still asking for a 24 colon per liter increase in gasoline prices. When will gasoline prices in Costa Rica reflect what is going on in the market?
Tags: Condoleezza Rice, Costa Rica, Iran, the United States, TicosLand
