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Oil prices soar on talk of possible US plans to attack Iran
AFP
NEW YORK
Petroleumworld.com 04 11 06New York oil prices rose strongly Monday after London's Brent contract soaring to a record high amid talk of potential military conflict between the United States and Iran.
New York's light sweet crude contract for May closed up 1.35 dollars at 68.74 dollars from Friday -- the highest close since January 30 -- after hitting an intra-day peak of 68.90 dollars.
That followed the record price reached in London for Brent North Sea crude of 68.93 dollars per barrel, up 1.64 dollars, to its highest point since the contract was first traded in 1988.
It beat the previous record 68.89 dollars reached on August 30, 2005 when Hurricane Katrina battered oil facilities in the US Gulf Coast.
That same day New York crude reached a record high 70.85 dollars per barrel.
But adjusted for inflation, prices remain below levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of 80.00 dollars a barrel in today's money.
"Oil futures were higher as tensions between Iran and the West remained high after news reports at the weekend suggested the US is looking at its military options," analysts at the Sucden brokerage in London said of Monday's trading.
President George W. Bush's comments that news reports were "wild speculation" did little to ease market tensions.
The Washington Post and the New Yorker magazine, reported over the weekend that the White House was studying options for military strikes against Iran's nuclear facilities to force Tehran to abandon its controversial nuclear programme.
Bush insisted Monday that the United States wants to settle the Iran nuclear crisis through diplomacy.
While the White House is still warning Iran about its uranium enrichment, which Washington and its allies believe hides a nuclear weapons programme, the administration went out of its way Monday to play down the reports.
"The doctrine of prevention is to work together to prevent the Iranians from having a nuclear weapon," Bush said.
Iran, the world's fourth-biggest producer with an output of 4.0 million barrels per day, insists its nuclear programme is for peaceful purposes.
Traders fear that action against the Islamic republic could severely disrupt the oil-rich nation's crude exports.
World oil prices soared by 40.0 percent in 2005 owing to supply disruptions and strong demand, especially by China which is experiencing an economic boom.
Brent North Sea, a light, sweet crude oil, is used to price more than 65 percent of the world's traded crude oil supplies, according to London's International Petroleum Exchange.
Although consumers have access to large supplies of heavy, sour crude, refiners prefer light, sweet oil because of its low sulphur content and relatively high yields of gasoline, heating oil as well as diesel and jet fuel.
AFP 04 10 06 2026 GMTCopyright © 1994-2006 Agence France-Presse. All Rights Reserved.
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