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Oil prices rise recede after spiking over 62 dollars
AFP
NEW YORK
Petroleumworld.com 02 28 06
Oil prices briefly soared above 62 dollars Tuesday before receding as the United States and its allies maintained pressure for tougher sanctions to curb Iran's nuclear ambitions, dealers said.
Prices reached as high as 62.65 dollars in New York and touched 62.16 dollars per barrel in London before retreating below the 62-dollar-mark.New York's main oil futures contract, light sweet crude for delivery in April, closed up seven cents at 61.46 dollars per barrel.
Across the Atlantic, the price of Brent North Sea crude for April delivery settled up a slight three cents at 61.36 dollars per barrel in London.
Traders said the sell-off in global stock markets had also applied pressure to the crude market.
"The (stock) sell-off in China overnight is now sinking oil as there are worries that a slowdown in China will mean a slowdown in energy demand," said Phil Flynn, an analyst at Alaron Trading.
Traders were also bracing ahead of Wednesday's weekly update on US energy stockpiles, with some analysts expecting a hefty drop in heating fuel supplies amid the recent US cold snap.
Iran also remained in focus.
"The rhetoric over Iran is heating up," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.
"Even though there is no real (oil) supply disruption associated with that, the increasing rhetoric between Iran and the West and the likelihood of the UN imposing sanctions has put geopolitical news back on the front pages.
"That factor has put more of the investors back into the oil market."
Iran, a key producer of crude oil, insisted on Tuesday that it would not yield to demands to suspend its nuclear fuel enrichment operations despite world powers having agreed to work on a new UN resolution that could lead to more sanctions against Tehran.
Diplomats from six key powers pledged in London on Monday to work on a new UN Security Council resolution over Iran's refusal to suspend uranium enrichment, which the West fears could lead to the development of nuclear weapons.
But Iranian Foreign Minister Manouchehr Mottaki retorted: "One thing that is not feasible is the Iranian nation backing down on having nuclear technology for peaceful purposes."
Oil market buyers are concerned that if Iran is punished with economic sanctions, the country might decide to disrupt its oil exports.Regarding weather issues, the US National Weather Service reported Monday that more than a foot of snow blanketed parts of the northeast of the United States, the country's largest heating oil market.
The US Department of Energy's weekly stocks report was expected to show a fall in stocks of distillates, which include heating oil, a drop in gasoline stocks and a small increase in crude oil inventories.
"Markets remain concerned about the potential for tightness in petroleum product markets," said Tobin Gorey, commodity strategist at the Commonwealth Bank of Australia.
AFP 272135 GMT 02 07
Copyright© 1999 AFP. All Rights Reserved.
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