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Oil prices mixed on Iran, OPEC talk
AFP
NEW YORK
Petroleumworld.com 09 29 06
Crude oil prices were volatile Thursday as the market dwelt on tensions over Iran and a possible supply cut by OPEC, analysts said.
New York's main contract, light sweet crude for delivery in November, climbed over 64 dollars for the first time since September 19 during the session before losing 20 cents to close lower at 62.76 dollars a barrel.
In London, Brent North Sea crude for November delivery held on to its gains to settle at 62.54 dollars a barrel, up 33 cents from Wednesday.
World oil prices have dived spectacularly in recent weeks on easing supply concerns. But they rallied sharply Wednesday, soaring 1.95 dollars in New York and 2.09 dollars in London.
Some gains were extended into Thursday owing to "a technically based rally and heightened concerns about Iran's nuclear enrichment programme", Sucden analyst Michael Davies said.
Talks between Iran's top nuclear negotiator Ali Larijani and European Union foreign policy chief Javier Solana failed to produce an accord but were positive and constructive, both officials said Thursday.
The United States is calling for economic sanctions against Iran, the world's fourth-biggest producer of crude, unless Tehran halts uranium enrichment activities.
Analysts warn that Iran could retaliate to sanctions by disrupting its oil exports, which would lead to a surge in crude prices.
Davies noted that crude futures were also supported by speculation that the Organization of the Petroleum Exporting Countries "may call an emergency meeting to cut oil production".
Barclays Capital analyst Kevin Norrish added: "OPEC needs to act quickly if it is to persuade the market it is serious about defending a price floor in the low 60 dollars, as a number of its most important members have recently signalled is the case."
The oil market has largely ignored a steep increase in US stockpiles of fuel, which ordinarily would depress prices.
The US Department of Energy said Wednesday that weekly inventories of distillates jumped by 2.6 million barrels to 151.3 million, nearing an eight-year high.
Ahead of the northern hemisphere winter, the market's focus has switched from gasoline to the level of distillates, which include heating fuel.
Reserves of gasoline showed an increase of 6.3 million barrels to 213.9 million in the week to September 22. That was almost six times analysts' consensus forecasts and the biggest rise in five years.
AFP 28 1951 GMT 09 06
Copyright ©2006 AFP. All Rights Reserved.
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