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Oil prices rise as Iran stands firm on nuclear ambitions
AFP
NEW YORK
Petroleumworld.com 07 12 06
Oil prices rose on global markets Tuesday on supply concerns sparked by Iran's apparent determination to pursue its nuclear ambitions despite deep opposition from the West, dealers said.
Analysts warn that Iran, the world's fourth-biggest oil producer, could disrupt its crude exports if hit by economic sanctions over its controversial nuclear project.
New York's main contract, light sweet crude for delivery in August, closed up 55 cents at 74.16 dollars per barrel after soaring as high as 74.32 dollars.
Brent North Sea crude for August delivery settled 78 cents higher at 73.67 dollars per barrel after striking a intraday peak of 74.02 dollars.
Iran's President Mahmoud Ahmadinejad insisted on Tuesday that his country was determined to complete its nuclear fuel cycle work and would not back down "one iota" in the face of international pressure.
"The Iranian nation is determined to obtain all of its rights, including full nuclear rights and the complete exploitation of the nuclear fuel cycle," he was quoted as saying by the ISNA news agency.
"It will not back down one iota in the face of ill-intentioned propaganda," Ahmadinejad was quoted as saying in the town of Malakan, northwestern Iran.
"This brings the geopolitical pot to full boil, yet again," said Mike Fitzpatrick, an energy analyst at Fimat, adding "we never held out much hope for conciliaton."
Ahmadinejad spoke as Iran's top nuclear negotiator Ali Larijani was in Brussels for fresh talks with EU foreign policy chief Javier Solana -- who six weeks ago presented Iran with an international offer of incentives if it agreed to freeze sensitive fuel cycle work.
Larijani warned that a "long road" remains ahead before Tehran's atomic standoff with the West can be solved, after his latest talks with European officials.
"By refusing the European Union's proposals, Iran's president has sent a clear hawkish signal to the market," Societe Generale analyst Alexandre Kervinio said.
Oil prices have been volatile in recent days due to a refocus on geopolitical concerns.
Last Friday the New York contract had hit a historic 75.78 dollars and Brent struck a record 75.09 dollars owing to renewed tensions over Iran and North Korea.
Crude futures had shed around three dollars late last Friday and on Monday as many traders chose to bank profits.
World powers have been pushing Iran to respond positively to the EU offer -- economic, trade and political incentives in exchange for a suspension of uranium enrichment.
The West, in particular the United States, wants Tehran to respond before a meeting of Group of Eight leaders in Saint Petersburg beginning Saturday.
US State Department spokesman Sean McCormack reiterated Washington's position again Tuesday, saying the formula given to Iran by permanent members of the UN Security Council plus Germany last month was clear.
"Suspend all enrichment-related and reprocessing-related activities. It's very simple," McCormack said.
However, some analysts said a slight easing in concerns over North Korea's missile tests had capped Tuesday's price gains. The country is not an oil producer.
"Some of the surge (last week) in oil prices was caused by the North Korean missile tests," said Victor Shum, an analyst with energy consultancy Purvin and Gertz.
"The tests have nothing to do with oil supply or demand, so the concerns were really hyped up and now the market is really correcting," Shum added.
Traders were also awaiting the release of weekly US energy stock inventories Wednesday morning.
AFP 11 1941 GMT 07 06
Copyright ©2006 AFP. All Rights Reserved.
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