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Oil prices climb on supply concerns
AFP
LONDON
Petroleumworld.com 06 27 06
World oil prices jumped on Monday, lifted by tensions surrounding major crude producer Iran and amid strong demand for energy in the United States, analysts said.
New York's main contract, light sweet crude for delivery in August, gained 93 cents to close at 71.80 dollars per barrel.
In London, Brent North Sea crude for August delivery climbed 93 cents to 71.80 dollars per barrel.
"Two main factors explain that the oil prices remain high: the pressure of Iran on the geopolitical front and the fact that the US demand is expected to continue to rise," Alaron Trading analyst Phil Flynn said.
Crude futures had risen last week on the back of strong gasoline demand data from the United States. According to the US Department of Energy, demand was close to daily records.
Meanwhile, the international crisis over Iran's nuclear program continued to simmer. The Islamic republic said Monday that it would only use its vast oil resources as a weapon of last resort in the dispute.
The comments came a day after Iran's oil minister threatened to use oil as a weapon, or possibly disrupt its energy exports, if the country's "interests are attacked", amid mounting pressure on Tehran's hardline leadership to freeze sensitive atomic work.
The West suspects that Iran, the world's fourth-biggest producer of crude, is secretly trying to build nuclear weapons. Iran denies this and insists its atomic program is purely for electricity generation.
"Further support has come from another clear statement from Iran that oil will be used as a defensive weapon if necessary," Barclays Capital analyst Kevin Norrish said.
The market also digested news from Iraq, which Sunday said its oil production stood at more than 2.5 million barrels a day, a record since the ouster of Saddam Hussein.
Iraqi Oil Minister Hussein Shahristani said on US television that Iraq hoped to be producing 4.3 million barrels by 2010 and to be challenging Saudi Arabia as the world's largest producer by 2015.
Iraq's oil production stood at about 2.5 million barrels a day when Saddam was deposed by US-led forces in 2003. It then collapsed to virtually nothing and has been slow to rebuild, in part owing to insurgent attacks.
AFP 26 2052 GMT 06 06
Copyright ©2006 AFP. All Rights Reserved.
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