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Oil prices fall as Atlantic storm fear recedes
AFP
NEW YORK
Petroleumworld.com 06 13 06World oil prices corrected lower after starting higher Monday, but traders said the market remained on edge over geopolitical jitters including Iran's nuclear drive.
Prices eased as the first tropical storm of the 2006 Atlantic hurricane season, Alberto, appeared on course to avoid US energy installations in the Gulf of Mexico.
New York's main contract, light sweet crude for delivery in July, shed 1.27 dollars to close at 70.36 dollars a barrel.
In London, Brent North Sea crude for July delivery slid 1.55 dollars to settle at 68.93 dollars a barrel.
"I'd say it's a correction, mostly," Fimat analyst Mike Fitzpatrick said. "There's no real fresh news."
Earlier Monday, prices rose as Alberto roared into the US Gulf of Mexico and as traders tracked the Iranian nuclear crisis.
"This morning, there were some concerns about the tropical storm in the US Gulf of Mexico, but it appears to be heading northeast towards Florida, and not towards the region that produces oil and natural gas," Calyon analyst Mike Wittner said.
"The market is more concerned about the route of the storm and where it is likely to impact, which at this point is more important than how severe it is," he added.
Energy facilities in the rig-rich Gulf Coast region account for more than a quarter of total American oil production.
Traders are fearful that this year's hurricane season -- which began on June 1 and lasts until the end of November -- could be another fierce one.
Last year, hurricanes Katrina and Rita devastated oil installations there and sent crude prices surging to then-record levels.
"With last year's devastating hurricane season still fresh in most peoples' minds and the prospect of another active season this year, all eyes will be glued to the weather report," Sucden analyst Sam Tilley said.
The market remained consumed by Iran's stand-off with the West over its disputed nuclear programme, traders said.
Iran, the world's fourth biggest crude producer, said Monday that its nuclear fuel work was non-negotiable, in another sign the Islamic republic is unwilling to suspend sensitive uranium enrichment work.
"Iran has achieved nuclear fuel technology. This is our absolute right, and we will not negotiate our absolute right with anyone," Iranian government spokesman Gholam Hossein Elham told reporters.
He was responding to a question on whether Iran was willing to suspend enrichment work in line with an international proposal that offers incentives and multilateral negotiations in return.
For months, Iran's controversial nuclear programme has driven prices up on concerns that international sanctions on the Islamic republic would disrupt crude supplies.
Washington and its allies fear that Iran's nuclear energy program is a clandestine drive to acquire nuclear weapons. Tehran, however, insists that its program is strictly for civilian purposes.
"The oil world is on a hair-trigger," said another Fimat analyst, John Kilduff.
"The problems that have wrought 70 dollar oil aren't going away quickly or easily," he said.
AFP 12 2029 GMT 06 06
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