Oil prices dip despite
Iran fears
By Antoine Agasse
AFP
NEW YORK
Petroleumworld.com 02 07 06
Oil prices ended slightly lower on world markets Monday as traders
appeared to shrug off concerns about an escalation of the crisis
over Iran's nuclear energy program.
New York's main contract, light sweet crude for delivery in March,
which had been higher for much of the day, turned lower in late
trade and closed down 26 cents at 65.11 dollars per barrel.
In London, the price of Brent North Sea crude for March delivery
dipped six cents to close at 63.33 dollars per barrel.
In early trade, the market appeared concerned that the International
Atomic Energy Agency voted to refer major crude producer Iran
to the UN Security Council over its nuclear ambitions.
The UN nuclear watchdog has been formally notified of Iran's decision
to resume full-scale uranium enrichment work.
But Jason Schenker at Wachovia Securities said some of the concerns
about Iran appeared overblown.
"Despite the news of escalation, I think the market does
not believe it's going to have a real impact on supplies,"
Schenker said.
"Both the US and Iran have come out and said oil is sort
of off limits in this debate. At this point Iran is not likely
to cut oil exports and if they were to do that they will lose
a lot of cash. And the US is not likely to cut (Iran's) exports
because that would limit not only US growth but global growth."
Tehran contends that its nuclear research is for peaceful purposes,
but the government is suspected by the United States and Europe
of trying to develop nuclear weapons.
Elsewhere, the market was also monitoring tense relations between
the United States, the world's biggest energy consumer, and Venezuela,
the fifth-biggest global crude exporter.
The country's President Hugo Chavez fired a blistering verbal
attack on US President George W. Bush, and flaunted the US thirst
for Venezuelan oil as he launched his re-election campaign on
Saturday.
Defense Secretary Donald Rumsfeld had last week compared Chavez's
rise to power to that of Adolf Hitler. Venezuela sells about 1.5
million barrels of oil daily to its powerful northern neighbor.
Nigeria also remained a concern for the market following further
unrest in Africa's biggest crude producer.
An oil refinery, operated by Anglo-Dutch energy giant Royal Dutch
Shell, has been shut down in the southern Nigerian port of Warri
because of damage by vandals to its crude oil supply pipeline,
a company spokesman said Sunday.
Mike Fitzpatrick at Fimat USA said that "absent the geopolitical
uncertainty, prices should be moving lower" because of ample
supplies in the market.
But he added: "The potential for supply disruptions are very
real; either from Iran restricting oil to the West or by the UN
placing sanctions or an outright embargo on Iranian oil. Tensions
between the US and Venezuela are also taking a more serious turn,
as both countries expelled diplomats last week."
AFP
02 06 06
Copyright
© 2006 AFP. All rights reserved
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