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AP Worldstream: Oil prices rise further above US$64 amid strong demand and geopolitical uncertainty

Mar 28, 2006
Crude oil futures rose on Tuesday in early Asian trading amid strong demand and nagging worries about supply from Iran and Nigeria.
Light, sweet crude for May delivery gained 9 cents to US$64.25 a barrel on the New York Mercantile Exchange. The contract on Monday fell 10 cents to settle at US$64.16 a barrel.
Gasoline increased 0.42 cents to US$1.8330 a gallon (3.8 liters) early Tuesday, while heating oil rose marginally to US$1.7830 a gallon. Natural gas rose less than one cent to US$7.075 per 1,000 cubic feet.
With the Northern Hemisphere's summer driving season approaching, gasoline at the pump in the United States averaged US$2.50 a gallon (3.8 liters), and government data showed that consumption was up 1.6 percent over the past four weeks compared with the same period a year ago.
That said, the U.S. Energy Department predicted last week that gasoline prices may not run up much higher for the time being. Still, concern about supplies from Nigeria and Iran, and growing anxiety about the next hurricane season in the Gulf of Mexico, were expected to limit any price decline. Some analysts believe gasoline prices could climb as high as US$3 a gallon this summer, though that assumes some significant disruptions at refineries, or difficulty in getting fuel to markets.
On Monday, militants in Nigeria's oil-rich southern delta released their last remaining foreign hostages _ two Americans and one Briton _ more than five weeks after the oil-industry workers were kidnapped.
The militants took nine foreign oil workers hostage Feb. 18 from a barge owned by Houston-based oil services company Willbros Group Inc., which was laying pipeline in the delta for Royal Dutch Shell PLC. The group released six of the captives after 12 days in captivity.
The militants are behind a spate of attacks that have cut Nigeria's oil exports by more than 20 percent. On Saturday, they said they killed three soldiers in fresh clashes near a key natural gas plant run by Shell. Shell said there was no impact on the gas plant.
Iran, the No. 2 oil producer in OPEC, also remains a potential source of concern. It has been referred to the U.N. Security Council over fears it may want to misuse its nuclear program to make weapons, but the council has been at loggerheads over U.S.-led efforts to ratchet up the pressure on Tehran.
Copyright 2006 Associated Press

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