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Oil prices rally after Easter slump
AFP
NEW YORK
Petroleumworld.com 04 11 07
World oil prices rebounded on Tuesday after plunging a day earlier on profit-taking, as key crude producer Iran again tested Western nerves, analysts said.
New York's main oil futures contract, light sweet crude for delivery in May, gained 38 cents to close at 61.89 dollars a barrel.
In London, the price of Brent North Sea crude for May delivery added 83 cents to 67.42 dollars a barrel.
The gap between the Brent and New York contracts -- at about five dollars -- is at a record margin owing to oversupply in the central United States, dealers said.
The New York contract had dived 2.77 dollars and Brent shed 1.28 dollars on Monday, as investors banked profits in light post-Easter trade.
"The lack of follow through indicates that yesterday's move was overdone and probably technical in nature," Fimat analyst John Kilduff said.
"Crude oil futures were higher as the market recovered on news that Iran is stepping up its nuclear enrichment program despite UN sanctions and calls from the West not to do so," Sucden analyst Michael Davies said in London.
"The release of 15 UK military personnel last week had helped to calm tensions between the West and Iran, but the Iranian announcement yesterday (Monday) that it had increased the number of centrifuges it is using in order to make nuclear material on an industrial scale has alarmed the market."
Iran, the world's fourth biggest producer of crude, on Tuesday pledged to expand its nuclear drive after announcing that its activities had entered an industrial phase, sparking new criticism from the West and renewed calls for negotiation.
Iran is aiming to have 50,000 centrifuges running, said Gholam Reza Aghazadeh, head of Iran's atomic energy organization.
The Islamic republic insists its nuclear drive is solely intended to generate energy, while the United States accuses it of seeking a nuclear weapon.
Iran's defiance of Western calls for it to suspend enrichment have already earned it two sets of UN sanctions but Tehran appeared to be in no mood to halt the sensitive process.
There are concerns that Iran may disrupt its oil exports should it be hit harder at the United Nations.
"The market is also being supported by expectations of another draw (fall) in US gasoline stocks," added Davies.
The US Department of Energy was set Wednesday to publish its weekly snapshot of crude oil inventories in the United States over the past week.
US gasoline reserves, which are being closely watched ahead of the American driving season, fell five million barrels to 205.2 million in the week to March 30, against a forecast drawdown of 300,000 barrels.
The sharper-than-expected fall is heightening concerns ahead of the US summer when many Americans take to the road on vacation.
"Another rash of refinery glitches over the last several days indicates refiners are still having a hard time building up gasoline stocks, which we suspect will eventually end up supporting higher prices across the whole complex," Fimat's Kilduff said.
AFP 10 2013 GMT 04 07
Copyright© 2007 AFP. All Rights Reserved.
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