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Oil market shakes off Iran jitters, focuses on mild US weather
AFP
NEW YORK
Petroleumworld.com 12 27 06Crude oil futures fell sharply Tuesday as the market focused on mild US winter temperatures expected to reduce heating oil demand, shaking off news of defiance by Iran towards UN sanctions.
In New York, light sweet crude for February delivery tumbled 1.31 dollars to close at 61.10 dollars a barrel.
The price of Brent quality North Sea oil for delivery in February also settled at 61.10 dollars a barrel, losing 1.32 dollars from Friday.
The markets opened higher after the Christmas holidays, amid jitters over Iran and Nigeria.On Sunday, Iran defied the United Nations Security Council which had voted to impose sanctions against it over development of its nuclear energy program.
Iran said that from Sunday it would start work on installing 3,000 centrifuges to enrich uranium.
In Nigeria a group of armed separatists in the oil region of the Niger delta in the south of the country threatened on Sunday to intensify its attacks daily in order to drive out foreign oil companies.
But James Williams, an analyst at WTRG Energy, said the market was more interested in the latest weather forecasts for the US, the world's biggest consumer of energy.
"The latest forecasts show the weather should remain warmer than normal for the next few weeks," he said.
"Most of the drop today was led by both heating oil and natural gas."
Williams said he did not expect the Iran situation to have a major impact on the market for now.
He said the United States "would not support a resolution that would stop crude oil shipments from Iran. So they came out with a minimal resolution that didn't affect anything."
On the Iranian side, Williams added, "Oil is their primary source of revenue so they're not going to cut off oil."Mike Fitzpatrick at Fimat USA said a number of geopolitical risks remain.
"The market will probably attach greater immediacy to further troubles in Nigeria," he said.
"People were burned alive when fuel from a vandalized pipeline exploded in Lagos. While this particular incident doesn't take much oil off global markets it does demonstrate that the political situation there, which has contributed to a considerable amount of the country's production being shut in, continues to deteriorate."
AFP 26 2029 GMT 12 06
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