* Oil rises as much as $1 after biggest one-week fall ever
* Talks between Iran and major powers were inconclusive
* Traders eye Tropical Storm Dolly, heading for Yucatan
(Updates prices, adds Brazil oil strike ends)
By Fayen Wong
PERTH, July 21 (Reuters) - Oil rose towards $130 a barrel
on Monday after its biggest one-week slide on record as
inconclusive talks between Iran and world powers over Tehran's
disputed nuclear programme dimmed prospects of ending the row.
Prices were also lifted by worries about Tropical Storm
Dolly, the first storm of the 2008 Atlantic hurricane season
that could disrupt oil production in the Gulf of Mexico.
U.S. light crude for August delivery <CLc1> was up 62 cents
at $129.50 by 0302 GMT, after rising as much as $1.25 earlier.
Last week crude slumped over $16, the biggest decline in
dollar terms since futures began trading in New York in 1983
and in percentage terms the steepest sell-off since late 2004.
London Brent crude <LCOc1> rose 66 cents to $130.85.
"The outcome of the Geneva meeting with Iran was quite a
disappointment and was the main factor in the lift in oil
prices this morning," said David Moore, a commodities analyst
at the Commonwealth Bank of Australia in Sydney.
"The markets had become quite hopeful on Friday that there
would be some sort of a resolution, but the meeting over the
weekend didn't result in any guarantees from Iran and that
raises the possibility of additional tensions."
Major powers on Saturday gave Iran two weeks to answer
calls to rein in its nuclear programme or face tougher
sanctions after talks ended in stalemate despite unprecedented
U.S. participation. []
Prospects of ending the row looked dim as Iran's top
nuclear negotiator Saeed Jalili said Iran would not discuss a
demand to freeze sensitive nuclear activities or face tougher
sanctions, though Iran's president on Sunday described the
talks as a step forward. []
The recent war of words between Iran and the West over
Tehran's nuclear programme have heightened tensions in the
Middle East and helped push oil prices to a record high of
$147.27 earlier this month.
Worries that Tropical storm Dolly could hit the Gulf of
Mexico also boosted oil prices on Monday.
The storm headed for Mexico's Yucatan Peninsula, but the
U.S. National Hurricane Center in Miami said it posed no
immediate threat to Gulf oil installations slightly south of
its projected path. []
Forecasters expect Dolly to emerge into the Gulf of Mexico
on Monday local time, north of the country's huge Cantarell oil
field and other ports and platforms used by the world's
sixth-largest oil producer and top supplier to the United
States.
In Brazil, a national oil workers strike that had a limited
impact on Petrobas' <PBR.N><PETR4.SA> output ended at midnight
on Friday but more walkouts loomed on the horizon.
[]
Despite oil's rebound on Monday, analysts said worries
about the health of the U.S. economy due to the housing crisis
would continue to weigh on oil prices, which have shed over
$18, or 13 percent, from the peak struck on July 11.
(Reporting by Fayen Wong, Editing by Michael Urquhart)
