Oil
prices rebound on Iran, Nigeria concerns
AFP
NEW
YORK
Petroleumworld.com
03 14 06
World oil prices shot higher on global markets Monday as traders
were unsettled by tensions in major crude producers Iran and Nigeria.
New York's main contract, light sweet crude for delivery in April,
soared 1.81 dollars to close at 61.77 dollars a barrel, rebounding
from a six percent slide last week.
In London, the price of Brent North Sea crude for April delivery
gained 1.37 dollars to 62.20 dollars per barrel in closing deals.
"This market is like Dr. Jeykll and Mr. Hyde," said
Tony Nunan, an energy risk manager for Mitsubishi Corporation.
"It has a very high volatility and, short-term, there are
plenty of inventories. However, the big concerns are Iran and
Nigeria," Nunan added.
New York prices dropped six percent last week after official data
revealed high inventories of US crude and the OPEC cartel maintained
its oil production levels at a 25-year high.
But the possibility of economic sanctions on Iran related to Iran's
nuclear program and ongoing violence in Nigeria are "increasing
the risk of staying short," said Phil Flynn, a senior analyst
at Alaron Trading.
The oil market fears that Iran, the world's fourth-biggest producer
of crude, could halt its energy exports if threatened with economic
sanctions over its disputed nuclear program.
On Monday Iran's economy minister said he believed the international
community was "unlikely" to impose economic sanctions.
In London analysts at the Sucden brokerage firm said that crude
futures were "likely to remain volatile, reflecting anxiety
about potential supply disruptions due to Iran's dispute with
Western world powers over its nuclear program."
Oil prices were being supported also by violence in Nigeria that
has cut 20 percent of oil output in Africa's biggest producer
of crude.
"The only thing that is keeping the price of oil high is
the threat of a loss of production from these two sources as the
world does not currently have enough spare capacity to cover any
major supply problem from each supplier," Sucden analysts
added.
Iran's hardline President Mahmoud Ahmadinejad meanwhile insisted
that his country would not be deterred on its nuclear program.
"We know well that a country's backing down one iota on its
undeniable rights is the same as losing everything," state
television quoted Ahmadinejad as saying.
"We will not bend to a few countries' threats as their demands
for giving up our nation's rights are unfair and cruel,"
he added.
Iran noted also that it was to start work in the next six months
on a second nuclear power station.
Tehran says its nuclear research is for peaceful purposes but
the United States alleges it is a cover for weapons production.
Iran's nuclear program is slated for discussion in the UN Security
Council.
AFP
03 13 06
Copyright
© 2006 AFP. All rights reserved.
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