Native American Energy Group Inc. (fka NAGP)

[davidmarkblack]

Iran worries send oil above $62
27/02/2007 20:44

London - Oil prices extended gains Tuesday as the United States and its allies maintained pressure for tougher sanctions to curb Iran's nuclear programme, dealers said.
Prices reached as high as $62.16/barrel in London and $62.65 in New York.

The price of Brent North Sea crude for April delivery showed a gain of 46 cents to 61.79 dollars per barrel in London electronic deals.

New York's main oil futures contract, light sweet crude for delivery in April, was up 51c at $61.90/barrel in pit trading.

Traders were also looking ahead to Wednesday's weekly update on US energy stockpiles, which could show a drop in supplies of heating fuel owing to cold weather in the final stages of the US winter.

"The rhetoric over Iran is heating up," said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore.

"Even though there is no real (oil) supply disruption associated with that, the increasing rhetoric between Iran and the West and the likelihood of the UN imposing sanctions has put geopolitical news back on the front pages.

"That factor has put more of the investors back into the oil market."

Iran, a key producer of crude oil, insisted on Tuesday that it would never yield to the key demand regarding its nuclear programme after world powers agreed to work on a new resolution that could lead to more UN sanctions against Tehran.

Diplomats from six key world powers had pledged in London on Monday to work on a new UN Security Council resolution over Iran's refusal to suspend uranium enrichment work, which the West fears could be used to make nuclear weapons.

But Iranian Foreign Minister Manouchehr Mottaki retorted: "One thing that is not feasible is the Iranian nation backing down on having nuclear technology for peaceful purposes."

Oil market buyers are concerned that if Iran is punished with economic sanctions, the country might decide to disrupt its oil exports.

Traders' nerves were also jangled after two members of the US-led coalition and a US contractor died in a suicide blast on Tuesday outside an Afghan base where US Vice President Dick Cheney spent the night.

Regarding weather issues, the National Weather Service reported Monday that more than a foot of snow blanketed parts of the northeast of the United States, the country's largest heating oil market.

The US department of energy's weekly stocks report was expected to show a fall in distillates, which include heating oil, a drop in gasoline stocks and a small increase in crude oil inventories.

"Markets remain concerned about the potential for tightness in petroleum product markets," said Tobin Gorey, commodity strategist at the Commonwealth Bank of Australia.

http://www.fin24.co.za/articles/markets/display_article.aspx?Nav=ns&lvl2=markets&ArticleID=1...