Oil Prices Rebound on Gulf Storm, Iran Tension

Oil prices rebounded on Monday as supply concerns brought by the tropical storm in the Gulf of Mexico and the breakdown of the latest Iranian nuclear talks weighed on the market.

Light, sweet crude for August delivery rose 2.16 U.S. dollars to settle at 131.04 dollars a barrel on the New York Mercantile Exchange. Price hit 132.05 dollars a barrel during the intraday trading, gaining strongly from last week's 16-dollar slide, which ended 128.88 dollars a barrel on Friday.

The U.S. National Hurricane Center warned that the Tropical Storm Dolly, which has moved into the Gulf of Mexico, could reach hurricane strength on Tuesday. The U.S. Energy Information Administration said on its current path the storm may miss major oil producing area but could still threaten coastal refineries.

Prices were also pressured as the negotiations between Iran and six Western countries on the Iranian nuclear program ended without agreement on Saturday. Analysts believed that Iran's refusal to halt its uranium enrichment plans could result in a new round of sanctions by the United Nations.

In London, Brent crude for September delivery rose 2.42 dollars to settle at 132.61 dollars a barrel on the ICE Futures Exchange.