Oil
prices risk record highs over Iran nuclear crisis: analysts
By
Perrine Faye
AFP
LONDON
Petroleumworld.com 01 13 06
A referral of Iran to the United Nations Security Council over
its nuclear programme is likely to push oil prices to record high
points above 70 dollars per barrel, analysts in London said on
Thursday.
The Iran crisis represents "a major source of upside risk
for oil prices", Barclays Capital analyst Kevin Norrish said.
He added: "It is not too difficult to construct a scenario
in which prices will get back past 70 dollars in relatively short
order."
Britain, France and Germany said on Thursday that the time had
come for the UN Security Council to become involved in the row
over Iran's nuclear programme.
Foreign ministers of the European troika said after crisis talks
in Berlin that they would ask the UN nuclear watchdog, the International
Atomic Energy Agency (IAEA), to convene a special meeting to refer
the matter to the highest UN body. The Security Council has the
power to impose international sanctions on Tehran.
Iran sparked international alarm and fury this week for breaking
UN seals on three nuclear facilities in order to resume nuclear
fuel work.
On Thursday in the wake of the pressure heaped on Iran by Western
powers, a barrel of crude for delivery in February climbed by
81 cents to 64.75 dollars in New York pit trading.
Crude oil futures hit historic high prices in nominal terms last
August.
Following the devastation wrought by Hurricane Katrina on US Gulf
Coast energy installations, prices struck 70.85 dollars per barrel
in New York and 68.89 dollars in London.
That marked a 70-percent jump between January and August 2005,
before a pull-back in prices owing largely to mild weather across
the northern hemisphere in the run-up to winter.
Amid the strong rally in prices in recent days, markets have begun
to draw comparisons to the Iranian revolution in 1979, when oil
prices surged to the highest ever level in real terms.
Adjusted for inflation, oil prices in New York had hit 87.23 dollars
per barrel on November 30, 1979, in today's money, according to
analyst estimates.
Global Insight analyst Simon Wardell said he did not envisage
that the UN Security Council would stop Iran from exporting its
oil as part of any sanctions that might be imposed on the second
biggest producer within OPEC.
However Iran might decide itself to cut supplies in order to create
a surge in prices that in turn would hurt the international community,
he added.
Such action "would be self-defeating (for Iran) and it could
only be done for a limited period of time, but it would certainly
spike prices", Wardell said.
Iran currently produces approximately 4.0 million oil barrels
per day.
AFP
01 12 06
Copyright
© 2006 AFP. All rights reserved
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