Oil prices steady as caution prevails
AFP
NEW YORK
Petroleumworld.com 02 10 06
World oil prices held in a narrow range Thursday after sharp losses
earlier this week as caution about Iran prevented further declines.
New York's main contract, light sweet crude for delivery in March,
edged up seven cents to close at 62.62 dollars per barrel.
In London, the price of Brent North Sea crude for March delivery
fell 31 cents to close at 60.75 dollars a barrel.
Prices fell Wednesday to their lowest levels since early January
as the market reacted to strong US supply data and discounted
fears about a cutoff from Iran due to the stalemate over its nuclear
energy program.
But Mike Fitzpatrick, analyst at Fimat USA, said the so-called
risk premium linked to Iran and other geopolitical concerns is
not likely to go away soon.
"There has only been a month's reprieve granted in addressing
Iran's nuclear ambitions," he said.
"There is still a good deal of 'risk premium' in the energy
price structure. Developments this week have extracted only a
small portion of that measure. There is still danger ahead."
In Singapore, Purvin and Gertz analyst Victor Shum said that possible
oil supply disruptions in major producer Iran remained a factor.
"The fact that we have the longer-term threat of supply disruption
due to the Iran issue... will add a risk premium to crude prices,"
he said.
Iran's nuclear energy program has triggered strong condemnations
from the international community and the International Atomic
Energy Agency (IAEA) voted last Saturday to refer Tehran to the
UN Security Council over the issue.
Tehran has responded by resuming uranium enrichment and stopped
spot checks of its nuclear sites by the United Nations. There
are also fears of further retaliatory moves that could disrupt
crude supplies from the oil rich country.
Crude oil prices closed lower Wednesday after tumbling about three
percent on Tuesday.
A weekly snapshot of US crude inventories from the US Department
of Energy (DoE) had shown on Wednesday that gasoline or petrol
inventories jumped 4.3 million barrels to 223.3 million in the
week to February 3.
That was more than double analysts' consensus forecast of an increase
of 1.9 million barrels. As a result, gasoline stocks in the United
States were 1.7 percent higher than their level at the same stage
last year.
The DoE also reported a drop in crude oil inventories of 300,000
barrels to a level of 320.7 million barrels. But the department
noted that crude reserves were 10.7 percent higher than their
level at the same time last year.
Reserves of distillates, used for heating and diesel fuel, dipped
300,000 barrels to 136 million, according to the DoE, compared
with a market forecast of a rise of 150,000 barrels.
Nonetheless, distillate supplies were 12.4 percent above last
year's levels.
Oil prices gained almost nine percent in January on strong fund
buying and rising geopolitical tensions, mainly in Iran and Nigeria,
who together account for approximately eight percent of global
crude oil production.
Crude futures hit 69.20 dollars in New York on January 23 but
have since declined, also owing to mild weather during the northern
hemisphere winter.
New York prices had hit a historic high point of 70.85 dollars
in August 2005 after Hurricane Katrina devastated energy infrastructure
in the US Gulf of Mexico.
AFP
02/10/06
Copyright
© 2006 AFP. All rights reserved
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