Iran nuclear rhetoric keeps oil prices high
US oil futures slightly pared gains Monday after hitting US$70 (HK$546) in overnight trading amid fears that Iran's steps to enrich uranium could bring it closer to the making of atomic weapons, increasing the chance of a confrontation with the West.
Tuesday, April 18, 2006
US oil futures slightly pared gains Monday after hitting US$70 (HK$546) in overnight trading amid fears that Iran's steps to enrich uranium could bring it closer to the making of atomic weapons, increasing the chance of a confrontation with the West.
If that happened, traders feared that oil supplies from the Persian Gulf would be disrupted.
In late morning trade, crude for May delivery, which is expiring Thursday, traded at US$69.50 a barrel, up 18 cents, after hitting US$70 earlier in ACCESS trading on the New York Mercantile Exchange.
In London, June Brent crude was up 12 cents at US$70.69 a barrel after soaring as high as US$71.40 earlier.
Analysts said NYMEX front-month crude would probably surpass its record high - US$70.85 hit on August 30 - this week.
"The continuing rhetoric out of Iran over the weekend helps to keep it supported and poised to go higher," said John Kilduff, senior vice-president, energy risk management group at Fimat USA.
Former Iranian president Akbar Hashemi Rafsanjani said Monday Iran would continue to enrich uranium following its announcement last week it had done it for use in power plants.
Meanwhile, more than 500,000 barrels per day of production continued to be shut in Nigeria following militant unrest.
Royal Dutch Shell said on Monday it had yet to assess its 115,000 bpd offshore EA field, despite repeated assurances from Nigerian officials that it would be reopened.
The geopolitical concerns and a sharply softer US dollar, enabled gold and silver futures in New York to hit their strongest levels in more than two decades, traders and analysts said.
June gold hit a contract high of US$611.80 on Monday morning that is also the metal's most muscular level since 1981. In mid-morning trade it eased US$609.40. May silver was last up 29 cents to US$13.145.
Metals continued to be strong with US copper futures climbing at the open, on the heels of a rallying Shanghai copper market, as the upward buying momentum continued to boost the red metal to successive all-time records, traders said.
In mid-morning trade, copper for May delivery was trading up 6.45 cents, or about 2.3 percent, at US$2.88 a pound, on the New York Mercantile Exchange's COMEX division, dealing between US$2.805 a pound and another new contract peak at US$2.935, its 13th new high in as many sessions.
Earlier, copper for July delivery rose as 1,820 yuan (HK$1,762) or 3.2 percent, to settle at 58,740 yuan on the Shanghai Futures Exchange. DOW JONES NEWSWIRES, REUTERS
