Oil prices rise in Asian
trade on Iran nuclear issue
AFP
SINGAPORE
Petroleumworld.com
03 10 06
Oil prices rose in Asian trade Friday after Iran's hardline regime
dug in for a confrontation with Western powers over moves to halt
its nuclear program, dealers said.
Prices had fallen below 60 dollars a barrel a day earlier on news
of healthy US crude oil inventories but fears the Iranian nuclear
issue could escalate reversed the trend.
At 12:00 pm (0400 GMT), New York's main contract, light sweet
crude for delivery in April, was up 13 cents to 60.60 dollars
from its close of 60.47 dollars in the United States on Thursday.
"The market is reacting to some rhetoric regarding the Iranian
situation," said Victor Shum, a Singapore-based analyst with
US energy consultancy Purvin and Gertz.
"Traders are moving to cover their short (sell) positions
and so the market is rebounding even though market fundamentals
are really quite conducive for lower prices.
"This illustrates how edgy the market is, how reactive it
is to geo-political events."
Western powers led by the United States want to curb Iran's nuclear
activities amid fears the country aims to develop nuclear weapons
but Tehran has insisted its research is for peaceful purposes.
A defiant Iranian President Mahmoud Ahmadinejad declared Thursday
that "the time for bullying is over" and that the West
"can not do a damn thing" against his country.
The UN Security Council was scrambling to agree a united, firm
but gradual response to Iran's defiance.
The United States said Thursday it will seek a "strong"
UN Security Council statement against Iran's nuclear programme
and Secretary of State Condoleezza Rice called Iran Washington's
biggest challenge.
| If market fundamentals are considered, prices should be going
down, Shum said, referring to US crude oil reserves which are
about 10 percent higher than at the same stage a year ago and
are at their highest level since May 1999.
The Organization of Petroleum Exporting Countries (OPEC) also
decided Wednesday to keep output at a near 25-year high of 28
million barrels per day (bpd).
"But over the next few days, the saber rattling will continue
over the Iran nuclear issue and so a price fall, if any, won't
be very significant," Shum said.
"At this moment, the rhetoric is winning (out) over market
fundamentals."
AFP
03 09 06
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