Oil
prices slide back to 60 dollars
AFP
NEW
YORK
Petroleumworld.com
03 11 06
World oil prices reversed earlier gains on Friday as the market
switched its focus back to healthy US crude stockpiles and away
from global supply concerns linked to Iran and Nigeria.
New York's main contract, light sweet crude for delivery in April,
shed 51 cents to close under the 60-dollar level at 59.96 dollars
a barrel.
In London, the price of Brent North Sea crude for April delivery
closed down 23 cents at 60.83 dollars a barrel.
Julian Lee, analyst at the Centre for Global Energy Studies, said
oil market fundamentals -- specifically rising crude stocks and
slowing demand -- were pointing to "a gentle easing"
of prices below 60 dollars.
He said that this downward effect was countered by geopolitical
concerns in key producing countries such as Iran and Nigeria.
"The path that prices take will be dictated by the balance
of these two forces," he said.
US crude oil reserves are about 10 percent higher than at the
same stage a year ago and are at their highest level since May
1999.
However, Fimat analyst Mike Fitzpatrick warned that "it is
apparently going to take more than growing inventories to turn
prices seriously lower" than 60 dollars.
That price level "is probably the value zone for the time
being", he said, citing "technical support, the threat
of new violence in Nigeria and the hardline stance of the Iranian
government".
Earlier Friday, crude futures had risen on fears that Iran could
cut its crude exports if hit by UN economic sanctions over its
nuclear programme.
Oil prices had rebounded by more than a dollar in London on Thursday,
one day after plunging on news of ample US energy supplies and
a decision by the OPEC cartel to keep pumping oil at a near 25-year
high.
The Organization of the Petroleum Exporting Countries decided
Wednesday to keep output at 28 million barrels per day (bpd).
Despite that, "the markets remain on edge over Iran's disputed
nuclear programme, which is expected to be discussed by the UN
Security Council next week", Sucden analysts said.
Western powers led by the United States want to curb Iran's nuclear
activities amid fears that the country is aiming to develop nuclear
weapons. Tehran has insisted that 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
"cannot do a damn thing" against his country.
Iran is the world's fourth-biggest oil producer and the second-biggest
exporter in OPEC, after Saudi Arabia.
AFP
03 10 06
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© 2006 AFP. All rights reserved.
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