VARIOUS: NYMEX oil futures settle above $70 a barrel for first time since NYMEX launched crude oil trading in 1983 amid fears over Iran's uranium enrichment

Record ID: 344413

  • Title: VARIOUS: NYMEX oil futures settle above $70 a barrel for first time since NYMEX launched crude oil trading in 1983 amid fears over Iran's uranium enrichment
  • Date: 18th April 2006
  • Summary: (AMREP) VARIOUS UNKNOWN LOCATIONS (FILE) (AMOCO VNR) OIL PUMP WORKING OIL PLATFORM AT SEA
  • Embargoed: 3rd May 2006 13:00
  • Keywords:
  • Topics: Economic News,Energy
  • Reuters ID: LVAEBROUH5WCYPQE6BGI9CWPWP5P
  • Story Text: U.S. front-month oil futures settled on Monday (April 17, 2006) above $70 a barrel for the first time since the NYMEX launched crude oil trading in 1983 amid fears Iran's uranium enrichment could bring it closer to making an atomic weapon and raise the chances of a confrontation with the West.
    Traders fear such a confrontation would cause oil supplies from the Mideast Gulf to be disrupted.
    Crude for May delivery, which expires on Thursday, settled at $70.40 a barrel, gaining $1.08, or 1.6 percent, on the New York Mercantile Exchange. The settlement surpassed the previous record of $69.81 on Aug. 30.
    Fadel Gheit, an oil analyst for Oppenheimer & Company said the situation regarding Iran was affecting oil prices, but it wasn't the only factor.
    "There is excessive speculation in the marketplace. Obviously the tension regarding the nuclear stalemate is the key factor here, but there are other hotspots in the market, Venezuela, Nigeria, Iraq, which is going to be with us for quite along time. These are all factors which are pushing oil prices to an all-time high," said Gheit.
    The contract hit a session high of $70.45, below the Aug. 31 high of $70.65 and just beneath the record $70.85 for a front month contract, also hit on Aug. 30, after devastating hurricanes hit the U.S. Gulf Coast.
    In London, June Brent crude settled up 89 cents, or 1.3 percent, at $71.46 a barrel, after hitting a record $71.62.
    NYMEX May gasoline settled at $2.1697 a gallon, up 6.18 cents, or 2.9 percent, the highest settlement since Sept. 30. The contract hit an intraday high of $2.177, also the highest since hitting $2.25 on Sept. 30.
    NYMEX May heating oil settled at $2.0229 a gallon, up 3.98 cents, or 2 percent, the highest since Oct. 4. It rose to a session high of $2.025, the highest since prices hit $2.0335 on Oct. 12.
    Former Iranian President Akbar Hashemi Rafsanjani said on Monday Iran would continue to enrich uranium following its announcement last week it had done it for use in power plants.
    "The Islamic Republic of Iran does not intend to stop," he told reporters in Kuwait during a visit to the Gulf state.
    The West suspects the nation is trying to build an atomic bomb and talk of a U.S. attack has topped the international news agenda since a report in The New Yorker magazine last week said Washington was considering using tactical nuclear weapons to knock out Iran's subterranean nuclear research sites.
    Fear of possible disruption of supplies from Iran have helped to drive the price of U.S. crude 20 percent higher since mid-February even as commercial crude stockpiles in the United States have risen to 345.3 million barrels, the highest in eight years.
    Meanwhile, more than 500,000 barrels per day of production continued to be shut in Nigeria following militant unrest.
    Adding to worries over supplies, a union grouping Nigeria's senior oil workers is considering calling a shut down of the operations of U.S. major Exxon Mobil in a dispute over unpaid staff housing allowances, union officials said on Monday.
    An Exxon spokesman said the dispute concerned only the downstream division and any strike would be unlikely to affect crude oil production. Exxon Mobil is operator at fields in Nigeria producing about 620,000 bpd.
    NYMEX trader, Raymond Carbone, told Reuters Monday (April 17) that the oil and gasoline price is almost impossible to predict and is dependent on mainly geopolitical factors. He said, "If anything were to happen on the Iranian front, in the Straits of Hormuz, in the region in general, we could see much higher prices than we have right now. Of course, if there is some peaceful solution to this nuclear enrichment programme, the Israeli-Palestinian problem, all of these, if there is some successful resolution ot these we might see the fundamentals of a well supplied oil market take over and lead us to lower prices down."
    Gasoline consumers are feeling the pinch as rising prices impact their budgets. They believe that the oil companies are making unreasonable profits and that foreign economic and political issues are not the only influential factors.
    Said Peter Hoffman, "I also think it's also the gas companies are using that as an excuse to raise the prices. It might have something to do with it, but prices shouldn't be over three dollars a gallon, it's unfair."
    Harlem resident, Kaquana Shahe said she has reached a point where she has to decide whether to buy lunch at work, or fill her car with gas.
    "I think that they have made enough money already off of us. This is just ridiculous. Three oh seven I just spent for eighty-seven, is that what that was? That's ridiculous, that's ridiculous. So at this point, I'm just really frustrated with the entire gas problem," she said.
    Ministers from the Organization of the Petroleum Exporting Countries have said there is nothing more the group can do to calm the markets.
    But Indonesia's OPEC governor Maizar Rahman said OPEC should increase production if it can.
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