VARIOUS: U.S. crude oil hits record high on Iran concern; set to hit new peaks this year

Record ID: 344411

  • Title: VARIOUS: U.S. crude oil hits record high on Iran concern; set to hit new peaks this year
  • Date: 18th April 2006
  • Summary: (W5) NEW YORK CITY, NEW YORK, UNITED STATES (APRIL 17, 2006) (REUTERS) WIDE SHOTS MOBIL GAS STATION; GAS STATION AND GAS PUMPS (7 SHOTS)
  • Embargoed: 3rd May 2006 13:00
  • Keywords:
  • Topics: Economic News,Energy
  • Reuters ID: LVADWUK6ME2QSLIH31QB3PSQC87X
  • Story Text: Oil hit a record 72.20 U.S. dollars a barrel on Tuesday (April 18) as Iran defied world pressure to halt its nuclear programme, raising new fears of a cut in supplies from the world's fourth biggest crude exporter.
    In London, North Sea Brent crude oil jumped 74 cents to set the new all-time high as Iran and the West exchanged increasingly sharp words over the Islamic Republic's determination to push ahead with uranium enrichment.
    U.S. West Texas Intermediate crude climbed to 70.88 U.S. dollars, smashing through its previous record of 70.85 U.S. dollars.
    Brent, an indicator of the cost of Europe's oil imports, was up 14 cents at $71.60 at 1344 GMT while WTI was up 10 cents at 70.49 U.S. dollars. High U.S. oil stocks have helped push WTI below Brent.
    "We have increased concern about the situation with Iran. Iran's the world's fourth largest oil producer and traders are worried that this whole dispute could start to affect oil exports from the country," said Reuters correspondent Alex Lawler.
    Iran is not the market's only concern.
    With almost a quarter of Nigerian oil production still shut after rebel attacks two months ago, oil consumers feel almost as vulnerable as they did during the Arab oil embargo in the 1970s.
    "We have the ongoing loss of about a quarter of Nigeria's production. That's about 500,000 barrels a day -- enough oil to cause a big increase in the price if it's off the market. And there are really no signs at the moment of when that production's going to return," Lawler said.
    Oil prices have soared from 20 U.S. dollars at the start of 2002 and are now nearing the inflation-adjusted peaks of over 80 U.S. dollars hit in 1980, the year after the Iranian revolution.
    Initially fired by strong demand from the United States and the fast-growing economies of China and India, the rise has accelerated over the past year on worries over supplies.
    Iraq's once significant oil industry is in crisis, Nigerian exports have been slashed by rebel attacks on the world's eighth biggest exporter and consumers are worried that Iran's exports could fall victim to its nuclear dispute with the West.
    The rally has also been aided by big investment funds putting their money into commodities in the hope of higher returns than they get from equities or bonds.
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