- This topic has 0 replies, 1 voice, and was last updated 9 years, 9 months ago by
.
-
Posts
-
Oil Touches a New Record on Supply Worries
LONDON (April 21/06) – The price of oil touched a new record above $73 a barrel Friday amid concern about Iran’s nuclear ambitions and declining U.S. gasoline stocks, but then fell back as traders took profits.
Analysts say oil prices are likely to climb higher in the weeks ahead as worries grow about how international pressure on Iran, OPEC’s No. 2 oil producer, will affect its crude output. Rebel disruptions of oil production in Nigeria also pose a risk to world supplies.
Traders also worried about the possibility of inadequate gasoline supply in the summer, after weekly U.S. government data showed a drop in domestic gasoline stocks.
“I’m inclined to think it’s not reached a peak yet,” said Tobin Gorey, commodity strategist at the Commonwealth Bank of Australia in Sydney. “We’re still faced with a tight supply-demand equation against the backdrop of strong economic growth, and there’s still more money to come into the market.”
Light, sweet crude for June delivery opened in electronic trading Friday at a high of $73.50 a barrel setting a new intraday record for a front-month contract on the New York Mercantile Exchange. The June contract had been trading at these levels, even reaching as high as $74.50 a barrel on Thursday, but Friday was the first day it traded as the front-month contract since the May contract expired Thursday.
However, the price fell 39 cents to $73.30 a barrel by midday in Europe.
Brent crude for June fell 66 cents to $72.52 a barrel on London’s ICE Futures exchange.
Gasoline futures fell nearly 3 cents to $2.1870 a gallon while heating oil prices lost more than 2 cents to $2.0335 a gallon. Natural gas slipped 11 cents to $7.945 per 1,000 cubic feet.”The pullback appears to be due to profit-taking, which is not surprising considering prices have really surged”in the past few days,” said Vkctor Shum, energy analyst with Purvin & Gertz in Singapore. “The decline will not be large because the Iranian issue is keeping a high floor under prices.”On Thursday, Hugo Chavez, president of Venezuela, one of the world’s top oil producers, said oil prices would reach $100 a barrel should concern over Iran’s nuclear weapons capability lead the United States to invade the Middle Eastern nation.”Traders are not relenting on their worries of Iran,” Gorey said, adding the Iranian threat was responsible for adding at least $15 per barrel to the oil price.The United States and Britain say that if Iran does not comply with the Security Council’s April 28 deadline to stop uranium enrichment, they wilh seek a resolution that would make the demand compulsory. Iran has consistently resisted calls to abandon its enrichment program.Also, in Nigeria, the fifth-biggest source of U.S. oil imports, militants exploded a car bomb inside a military base late Wednesday, in their first major attack since February. This year, the group has cut more than 20 percent of Nigeria’s daily oil exports of 2.5 million barrels.A spokesman for Shell Petroleum Development Co. in Nigeria said Friday that security concerns in the region were preventing the restart of up to a fifth of its oil output and that the company was not in a hurry to start up production.Royal Dutch Shell PLC’s announcement Thursday that its Mars platform will resume normal production by late June offered some ralief to the markets. It is the largest oil platform in the Gulf of Mexico damaged by Hurricane Katrina, and accounts for about 5 percent of total Gulf of Mexico oil and natural gas production.
- You must be logged in to reply to this topic.