- Title: VARIOUS: Oil and metal prices reach new highs over Iran and Nigeria concerns
- Date: 19th April 2006
- Summary: MAN MAKING HAND SIGNALS
- Embargoed: 4th May 2006 13:00
- Topics: Economic News,Energy
- Reuters ID: LVAEI3RXYLJGBJQEX46SD2VOBSJA
- Story Text: U.S. crude oil futures traded near all-time highs at midday Tuesday (April 18) amid persisting supply worries over OPEC members Iran and Nigeria and jitters over gasoline supply ahead of the peak summer driving season.
At 11:56 a.m. EDT (1556 GMT), crude for May delivery, which expires on Thursday (April 20), was up 25 cents at $70.65 per barrel on the New York Mercantile Exchange as Iran defied world pressure to halt its nuclear program, raising new fears of a cut in supplies from the world's fourth biggest crude exporter.
Ira Epstein, President of Ira Epstein & Co., said that while the situation with Iran is affecting oil prices, other factors have contributed to the jump as well.
"I think Iran, just for their rhetoric to come down, maybe to tone down their hard line, that definitely would push oil down below $70 dollars (USD). Also if Nigeria comes back on and also, we're still having problems with our refinery utilisation from the past two hurricanes. So if more refinery utilisation comes on that would help also."
Aided by fund buying, which has also sparked record highs for gold, silver and copper, May crude oil traded as high as $70.88 in ACCESS electronic trading on NYMEX, surpassing the previous record of $70.85 set last summer after hurricanes devastated the U.S. Gulf Coast.
In London, June Brent crude traded 23 cents higher at $71.69 a barrel after hitting a record $72.20.
"Gold and oil to an extent are having a correlation. Oil is getting everyone very nervous. There's all these rumblings about pre-emptive strikes in Iran -- whether or not that happens is beside the point -- and also the Iranians making some fairly strong statements against the Israelis. That's causing destabilisation in that area and there's a definite, definite move towards people using gold as a long term hedge, if you will, against disaster," " said Malcolm Freeman, Managing Director of Ambrian Commodities.
NYMEX May gasoline was up 1.13 cents at $2.181 per gallon, after setting a high of $2.205.
Forecasts for U.S. inventory data due out Wednesday (April 19) call for a 2.2 million barrel drop in gasoline supplies for the week to April 14. If so, that would be the seventh straight week that supplies have fallen.
U.S. retail gasoline prices rose 10 cents last week to average $2.78 a gallon, up 29 cents over the last three weeks and 55 cents higher than a year ago, the government said on Monday.
As for how high prices could go, Epstein said, "You know we're not really hearing anything. 75 sounds like a nice round number. You know, the August 31st high was $70.85 (USD), they broke that this morning with overnight trading. During the day section we're having trouble getting to those levels, but we still have a lot of time left today."
Iranian President Mahmoud Ahmadinejad declared his country a nuclear power last week, saying it had enriched uranium to the level used in power stations. On Tuesday, he delivered a warning to any nation considering attacking the Islamic republic over its restarted nuclear programme.
The United States has said it wants a diplomatic solution to the standoff but has not ruled out a military option.
OPEC's president said oil would retreat from its record high if Iran's opponents stopped talking so tough.
More than 500,000 barrels per day of production remained shut in Nigeria amid militant threats, increasing traders' worries about gasoline supply for the summer driving season.
In a preliminary Reuters survey for U.S. petroleum data due Wednesday (April 19), analysts forecast a 1.4 million barrel drop in distillate supplies, which include heating oil and diesel fuel, and a 1.9 million barrel rise in crude inventories.
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