New York – Oil bounced slightly off seven-month lows near $90 a barrel on uncertainty surrounding economies from Europe to China. In addition, U.S. supplies continue to grow.

Benchmark U.S. crude fell $2.14, or 2.3%, to $89.71 per barrel in intraday trading. At the close, oil was trading at $90.06. The price hadn’t been below $90 per barrel since Nov. 1.

The European Union summit is the 18th since Greece was shaken by debt and the first since an anti-austerity campaign carried Francois Hollande to France’s presidency. The euro sank to the lowest level in almost two years.

Depending on the outcomes of these meetings, the oil price could find itself pushed decisively higher or lower. The standoff over Iran’s nuclear program has been a key driver of oil prices this year.

International Atomic Energy Agency chief Yukiya Amanosaid Tuesday that his investigators will have access to Iranian sites, scientists and documents in an effort to ensure the Middle Eastern country isn’t developing nuclear weapons. Iran insists its nuclear program is only for power and medical applications.

“This is a good thing for the consumer, that’s for sure,” independent oil analyst Andrew Lipow said.

“The Iranians seem to be softening their position and that could lead to an easing of sanctions,” said Christopher Bellew at Jefferies Bache.

Some analysts say oil should continue to drop as tensions in the Middle East lessen and demand remains subdued.

“We still feel that fresh lows are likely,” energy trader and consultant Ritterbusch and Associates said in a report.

Trading volumes, which were light earlier in the week, improved slightly, with Brent activity close to the 30-day average. U.S. crude trade was about 17 per cent below that level.


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