World Oil prices shoot to 6-month high
Pastor Dale Morgan
World Oil prices shoot to 6-month high*
From correspondents in Singapore
March 28, 2007 02:04pm
Article from: Agence France-Presse
OIL prices rallied in Asian trading today, touching a six-month high in
a market tense over Iran's nuclear intentions and the country's
detention of 15 British naval personnel.
US military exercises in the Gulf involving two US aircraft carriers
also unsettled the market, they said.
At 1.39pm, New York's main oil futures contract, light sweet crude for
delivery in May, was up 89 cents at $US63.82 a barrel from $US62.93 in
late US trades. Brent North Sea crude for May was up 92 cents at $US65.52.
"The overriding factor today is still the Iranian situation. It's a lot
of "just in case" buying at this stage," said Daiwa Securities analyst
Mark Pervan in Melbourne.
"It's a jittery market at this point of time," he added.
Industry experts say Iran's oil exports could easily be disrupted should
tensions surrounding the Islamic Republic's nuclear program escalate.
"Although the odds still remain low for a confrontation to occur,
political risk premium is certainly being priced into futures again,"
said Fimat energy analyst Mike Fitzpatrick.
"I think the market will be watching developments ... Prices are very
strong. If nothing substantial happens in the next two or three days,
there would be some profit taking," Mr Pervan said.
Iran, the world's fourth-biggest producer of oil and a key member of the
Organisation of the Petroleum Exporting Countries, rejected overnight UN
Security Council conditions that it suspend uranium enrichment in return
for talks on its controversial nuclear program.
Last Saturday, the Security Council had unanimously approved further
sanctions against Iran.
The international community fears Iran's nuclear effort could be used to
make nuclear weapons. Tehran insists its nuclear programme is for
peaceful energy purposes.
The imposition of sanctions followed news on Friday that Iran had seized
15 British sailors and marines in the Gulf, a move which triggered
unease in the oil market.
British Prime Minister Tony Blair warned Iran that efforts to secure the
release of the 15 would enter a "different phase" if diplomatic efforts
failed.
Dealers said the market was looking ahead to the US Department of
Energy's (DoE) weekly update on energy inventories later Wednesday, with
the report expected to show further falls in gasoline (petrol) reserves.