Reply #2: Oil under $70 on Iran, US gasoline build forecast [View All]

[ozymandius]

SINGAPORE (Reuters) - Oil held below $70 on Tuesday as Washington dismissed Iran's move suggesting ways to ease tension over Tehran's nuclear plan, and gains will likely be limited by forecasts for another increase in U.S. gasoline stocks.

U.S. light crude edged up 5 cents to $69.82 a barrel by 0758 GMT, after falling 42 cents on Monday on hopes the unprecedented letter from Iranian President Mahmoud Ahmadinejad to President Bush could help break the diplomatic impasse.

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U.S. officials have shrugged off the Iranian letter, an 18-page treatise that does not address concerns over Tehran's nuclear policy beyond defending its rights to scientific research and focused on U.S. foreign policy misdeeds.

"The impact of the Iran letter on the markets is still quite uncertain. At worst, it is neutral and at best, it's good because this is the first time that, at least, there is a willingness to talk," said Michael Coleman, managing director of hedge fund Aisling Analytics.

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