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World oil prices ease after striking record highs
AFP
NEW YORK
Petroleumworld.com 07 09 06
Global crude oil prices soared to record highs over 75 dollars a barrel on Friday before receding as strong demand and geopolitical angst continued to roil the energy market, traders said.
Geopolitical tensions over Iran's nuclear program and North Korea's missile tests earlier this week continued to support high oil prices on both sides of the Atlantic.
New York's main contract, light sweet crude for delivery in August, closed down 1.05 dollar at 74.09 dollars per barrel.
However, the contract had shot up to 75.78 dollars per barrel in earlier trading, smashing a previous record high reached on Wednesday in the aftermath of North Korea's missile salvo.
Meanwhile in London, Brent North Sea crude for August delivery fell 57 cents at 73.51 dollars per barrel in closing trades.
Brent had also punched through 75 dollars in electronic trading before the London market opened Friday, striking 75.09 dollars and piercing a prior May 2 record of 74.94 dollars before retreating.
And some analysts said oil prices were likely to leap higher still, partly as holidaying Americans continue pumping high volumes of gasoline (petrol) to reach their vacation haunts.
"I do believe that 80 dollars is definitely within reach, I just don't know if it's going to happen within a month or within two months," said Steve Bellino, an energy analyst at Fimat USA.
"Given the current spare capacity situation and recent market sensitivity to any chatter surrounding the Middle East and hurricanes, light crude prices could easily reach the 90-dollar-plus mark if something material were to happen on any of those fronts," added Bart Melek, an analyst at BMO Nesbitt Burns.
Traders said global concerns would continue to overshadow the market.
However, adjusted for inflation, current crude prices remain below the adjusted value of 85 dollars reached after the 1979 Iranian revolution.
Iran and North Korea continued to be the focus of attention in recent trading.
US President George W. Bush said Friday that he was trying to get some of the US' diplomatic partners to see past their "economic interests" and take a harder line towards Iran and North Korea.
Bush did not name names, but he had been asked about opposition from Russia and China to imposing sanctions on Iran, which faces a US-backed deadline next week for accepting a proposal on its nuclear programs.
"Some nations are more comfortable with sanctions than other nations. And part of the issue we face in some of these countries is that they've got economic interests," Bush said in Chicago.
In Brussels, EU foreign policy chief Javier Solana's spokeswoman said Solana had made a "good start" in talks with Iran's top nuclear negotiator on defusing Tehran's nuclear standoff with the West.
The upbeat comment came despite Tehran's repeated insistence that it will not bow to pressure to respond rapidly to an international offer aimed at curbing its nuclear plans. It also denies it is seeking nuclear weapons.
"Iran's answer to the package of incentives proposed by the West still remains unclear," Sucden analyst Michael Davies noted.
Analysts argue that any sanctions against the Islamic republic might lead to severe disruptions of the Middle Eastern nation's crude exports.
And at the United Nations, a binding draft resolution calling for sanctions against North Korea over its missile tests will be formally submitted to the Security Council later in the day, US Ambassador John Bolton said.
The market was further supported by strong demand and stretched supplies, analysts added.
AFP 07 2020 GMT 07 06
Copyright ©2006 AFP. All Rights Reserved.
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