Amid strong supplies, crude oil stays on downward trend
By Julie Charpentrat
AFP
NEW YORK
Petroleumworld.com 02 14 06
Crude oil prices fell on global markets Monday as traders kept
a focus on strong US supplies and discounted concerns about a
flareup over Iran's nuclear energy program.
New York's main contract, light sweet crude for delivery in March,
gave up 60 cents to 61.24 dollars per barrel in closing deals.
In London, the price of Brent North Sea crude for March delivery
edged down 26 cents to 59.38 dollars per barrel in closing trade
after earlier hitting 59.10 dollars -- the lowest level since
January 3.
Mike Fitzpatrick, analyst at Fimat USA, said that supply factors
were foremost in traders' minds with any move on sanctions against
Iran apparently delayed.
He said he expects further drops in oil futures prices "unless
estimates for this week's inventory data show sizable declines,
or if the actual data shows considerable contraction."
Even a big snowstorm in the United States failed to stop the downward
trend.
"Despite record snowstorms in the US northeast over the weekend,
oil prices continue to look soft" as traders focused on falling
gasoline prices, noted Barclays Capital analyst Kevin Norrish.
Road, rail and air systems across the US northeast -- the world's
largest consumer region of heating fuel -- struggled back to life
Monday after a massive blizzard dumped record snowfall on New
York.
Severe weather was expected to continue this week and as a result,
US heating oil demand was expected to rise strongly, analysts
said.
Meanwhile, Russia awaited an Iranian delegation for talks on Thursday
aimed at resolving a standoff over the country's nuclear program,
Deputy Foreign Minister Sergei Kislyak said in reaction to reports
of a delay from Tehran.
Diplomats who asked to remain anonymous told AFP Monday that Iran
had begun putting uranium feedstock gas into centrifuges, defying
the West with actual enrichment work on making what can become
nuclear reactor fuel or material for an atomic bomb.
New York crude futures had topped 66 dollars per barrel a week
ago after the International Atomic Energy Agency voted to refer
Iran to the UN Security Council over its controversial nuclear
programme.
That, in turn, sparked concerns that Iran could retaliate by halting
oil exports.
However prices slipped heavily later in the week as concern eased
about possible disruptions to oil exports and as government data
revealed healthy US stockpiles.
"Hefty crude oil and heating oil stockpiles and rising gasoline
stocks, in particularly the latter, along with relative quiet
on the Iran front has led the market to give back some of the
risk premium," analysts at the Sucden brokerage said Monday.
In the near term, Iran's dispute with the United Nations over
nuclear research would likely keep prices above 60 dollars per
barrel, said Victor Shum, an analyst with energy consultancy Purvin
and Gertz in Singapore.
"The dark cloud of the Iran situation is going to hang over
the market for a while and it will provide some support to prices,"
he said.
However prices in New York are far below the level of 69.20 dollars
reached on January 23, and the all-time high of 70.85 dollars
in August 2005 after Hurricane Katrina disrupted supplies.
Iran is the fourth-biggest oil producer worldwide, pumping some
3.9 million barrels per day, according to US Department of Energy
data for January. Of that, about 2.7 million barrels per day are
exported.
Elsewhere, Group of Eight finance ministers wrapped up Moscow
meetings Saturday with a joint statement warning that volatile
energy prices threatened prospects for solid world economic growth
in 2006.
AFP
02/13/06
Copyright
© 2006 AFP. All rights reserved
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