Oil Energy Thread (oih)

[madrose1]

Oil $60+ surges on winter chill, Iran posturing
By Associated Press | February 9, 2007

NEW YORK -- Oil prices surged $2 a barrel late yesterday, as energy traders rushed back into the market amid frigid temperatures in the United States and political tension overseas.

Earlier in the session, the market had been trading hesitantly, coming off a sharp drop a day earlier and struggling to find direction. Oil prices have been rising over the past two weeks on frigid US weather. They have so far been unable to surpass the $60 mark.

Light, sweet crude for March delivery rose $2 to settle at $59.71 a barrel in late trading on the New York Mercantile Exchange, after peaking at $59.87. It was the highest settlement price since Dec. 29, when crude closed at $61.05.

Factors such as renewed warnings out of Iran, violence in Nigeria, and record cold in the United States kept prices afloat yesterday -- leading traders to believe that $60 a barrel may not be as insurmountable as they thought.

"This is trend-chasing. It's very nervous, short-term, speculative trading. People were guessing that a top was in the market, and now they've been disappointed that prices didn't fall further," said Tim Evans, energy analyst at Citigroup Global Markets.

The daily volatility in trading "shows that the market is still solidly in the $56-$60 range," said Victor Shum, an energy analyst with Purvin & Gurtz in Singapore.

Also yesterday, Iran stepped up its warnings to the United States, which rekindled worries that supplies from the oil producer could be hindered, said James Cordier, president of Liberty Trading Group. Iran's supreme leader, Ayatollah Ali Khamenei, said Tehran will strike US interests around the world if his country is attacked.