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THE NEW YORK TIMES: World Oil Prices Rise on Supply Concerns

Apr 4th, 2006
by admin.

By THE ASSOCIATED PRESS
VIENNA, Austria (AP) — World oil prices rose Monday, briefly topping $67 a barrel, on the uncertain outlook for supplies out of Iran and Nigeria.
Light sweet crude for May delivery settled 11 cents higher at $66.74 a barrel on the New York Mercantile Exchange, after climbing as high as $67.90 earlier in the day.
Last week, prices made solid gains on supply concerns linked to U.S. gasoline inventories, which have been falling ahead of the U.S. summer driving season, when demand peaks.
Iran's nuclear ambitions were keeping a high floor under prices, analysts said.
''A lot of uncertainty remains in how the Iranian situation will work itself out,'' said Victor Shum, energy analyst with Purvin & Gertz in Singapore. ''There is some concern in the Asian market on whether Iran is a reliable supplier.''
The U.N. Security Council on Wednesday voted unanimously to demand that Iran suspend nuclear enrichment but Iran has remained defiant, saying enrichment is ''irreversible.'' The standoff has ratcheted up tensions over Iran's nuclear program.
Iran said Monday it successfully tested its second new torpedo in as many days, the latest weapon to be unveiled during war games in the Gulf that the military said are aimed at preparing the country's defenses against the United States.
Elsewhere, Nigerian Oil Minister Edmund Daukoru said Monday that Royal Dutch Shell PLC has told him it will take around a month to bring back most of the oil production shut down because of unrest in the country's oil-rich delta.
Daukoru, who is also the president of the Organization of Petroleum Exporting Countries, told Dow Jones Newswires that around 27 percent of Nigeria's output had been knocked out by ethnic rebel attacks in the Niger Delta region. Militants have pledged more attacks to get a bigger cut for southerners of the oil revenues held by the federal government.
The recent attacks and kidnappings cut the country's crude oil production by more than a quarter, or 641,000 barrels a day, out of some 2.4 million barrels a day of production.
Looking further ahead, David Dugdale of MFC Global Investment Management took note of the approaching hurricane season in the Gulf of Mexico. That, plus real or threatened instability in Iran and Nigeria, make for ''good reasons to believe that prices should remain at high levels,'' he said.
Supply concerns also supported gasoline prices.
U.S. gasoline stocks have fallen nearly 10 million barrels in the past four weeks, a trend analysts expect to continue for several more weeks as refiners undergo seasonal maintenance work.
Gasoline futures fell 2.11 cents to close at $1.8632 a gallon, while heating oil futures were essentially unchanged at $1.8622 a gallon.
Natural gas futures rose by 3.4 cents to settle at $7.244 per 1,000 cubic feet.
Venezuela's President Hugo Chavez, in an interview to be broadcast Monday, says he would like to see oil prices stabilized at $50 a barrel. ''That's a fair price, it's not a high price,'' Chavez said in an interview with the British Broadcasting Corp.

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