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05-02-2006, 12:51 PM
By George Jahn, Associated Press Writer
VIENNA — Oil prices rose above $74 a barrel Tuesday — flirting with their record high above $75 reached last month — amid concern that international pressure on Iran to modify its nuclear program may lead to supply disruptions from the key exporter.
Bolivia's moves to secure greater state control of its energy reserves and production also supported prices, as did glitches at several U.S. and foreign refineries, despite the relatively small amount of gasoline shortfalls involved.
Moves toward nationalization by Bolivian President Evo Morales, along with similar plans in Venezuela and Ecuador "could influence further supply worries," said Vienna's PVM Oil Associates.
Still, Iran remained the main focus of concern.
"Traders are most concerned about the Iranian issue, as the situation appears to be getting worse," said Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo. PVM also saw Iran as causing the main "stir in the market."
Light, sweet crude futures for June delivery on the New York Mercantile Exchange rose 33 cents to $74.03 a barrel in electronic trading by afternoon in Europe — moving closer to the intraday peak of $75.35 reached briefly on April 21.
In comments likely to further pressure prices, Iran's deputy oil minister, M. H. Nejad Hosseinian, said Tuesday crude oil prices are likely to hit $100 a barrel this winter as demand outpaces supply. "By winter, it is very much possible," Hosseinian said, when asked by reporters in India if global crude prices would peak at around $100 barrel.
"Oil supply in the short term cannot be increased," he told reporters in New Delhi.
The June contract had jumped $1.82 Monday to settle at $73.70 in response to refinery outages in Italy and California, violence in Nigeria, the fifth-largest source of U.S. oil imports, and Iran's defiance of a U.N. Security Council deadline on Friday to stop enriching uranium.
The United States, Britain and France plan to introduce a new Security Council resolution this week that would make Iran's compliance with their demands mandatory, and enforceable through sanctions or military action.
There has been no talk of economic sanctions that could slow Iran's oil exports. China is a big customer for Iranian oil, and a cutoff of its oil exports would likely send oil prices surging.
"At some stage, I think Iran will use its oil as a weapon to negotiate with the U.N. and the U.S., which would push up the market — although they are unlikely to stop exports altogether because they need the money," Emori said.
June Brent crude futures on London's ICE Futures exchange rose 28 cents to $74.17 a barrel.
EU spokesman Ferran Tarradellas Espuny said that while European Union nations had little to no imports of natural gas from Bolivia, the move "may have a negative impact on markets, because the markets are now subject to considerable pressure as far as prices are concerned." The European Commission said it was concerned and would study the impact of the move on Bolivia's economy and to foreign investors there.
Refinery disruptions added to market jitters Monday — some small fires at an ERG plant in eastern Sicily, which refines about 160,000 barrels of oil a day, and a power failure at a ConocoPhillips plant in California, which refines about 105,000 barrels a day. The ConocoPhillips plant restored power Monday, but it was unclear how many days the ERG plant would be shut down.
Gasoline futures rose more than a cent to $2.1585 a gallon and heating oil just over a penny to $2.0690 a gallon. Natural gas prices rose nearly 13 cents to $6.820 per 1,000 cubic feet.
Crude oil prices are about 40% higher than a year ago. But accounting for inflation, prices are still about 20% below the records reached in 1981, when supplies became tight after a revolution in Iran and a war between Iraq and Iran.
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VIENNA — Oil prices rose above $74 a barrel Tuesday — flirting with their record high above $75 reached last month — amid concern that international pressure on Iran to modify its nuclear program may lead to supply disruptions from the key exporter.
Bolivia's moves to secure greater state control of its energy reserves and production also supported prices, as did glitches at several U.S. and foreign refineries, despite the relatively small amount of gasoline shortfalls involved.
Moves toward nationalization by Bolivian President Evo Morales, along with similar plans in Venezuela and Ecuador "could influence further supply worries," said Vienna's PVM Oil Associates.
Still, Iran remained the main focus of concern.
"Traders are most concerned about the Iranian issue, as the situation appears to be getting worse," said Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures in Tokyo. PVM also saw Iran as causing the main "stir in the market."
Light, sweet crude futures for June delivery on the New York Mercantile Exchange rose 33 cents to $74.03 a barrel in electronic trading by afternoon in Europe — moving closer to the intraday peak of $75.35 reached briefly on April 21.
In comments likely to further pressure prices, Iran's deputy oil minister, M. H. Nejad Hosseinian, said Tuesday crude oil prices are likely to hit $100 a barrel this winter as demand outpaces supply. "By winter, it is very much possible," Hosseinian said, when asked by reporters in India if global crude prices would peak at around $100 barrel.
"Oil supply in the short term cannot be increased," he told reporters in New Delhi.
The June contract had jumped $1.82 Monday to settle at $73.70 in response to refinery outages in Italy and California, violence in Nigeria, the fifth-largest source of U.S. oil imports, and Iran's defiance of a U.N. Security Council deadline on Friday to stop enriching uranium.
The United States, Britain and France plan to introduce a new Security Council resolution this week that would make Iran's compliance with their demands mandatory, and enforceable through sanctions or military action.
There has been no talk of economic sanctions that could slow Iran's oil exports. China is a big customer for Iranian oil, and a cutoff of its oil exports would likely send oil prices surging.
"At some stage, I think Iran will use its oil as a weapon to negotiate with the U.N. and the U.S., which would push up the market — although they are unlikely to stop exports altogether because they need the money," Emori said.
June Brent crude futures on London's ICE Futures exchange rose 28 cents to $74.17 a barrel.
EU spokesman Ferran Tarradellas Espuny said that while European Union nations had little to no imports of natural gas from Bolivia, the move "may have a negative impact on markets, because the markets are now subject to considerable pressure as far as prices are concerned." The European Commission said it was concerned and would study the impact of the move on Bolivia's economy and to foreign investors there.
Refinery disruptions added to market jitters Monday — some small fires at an ERG plant in eastern Sicily, which refines about 160,000 barrels of oil a day, and a power failure at a ConocoPhillips plant in California, which refines about 105,000 barrels a day. The ConocoPhillips plant restored power Monday, but it was unclear how many days the ERG plant would be shut down.
Gasoline futures rose more than a cent to $2.1585 a gallon and heating oil just over a penny to $2.0690 a gallon. Natural gas prices rose nearly 13 cents to $6.820 per 1,000 cubic feet.
Crude oil prices are about 40% higher than a year ago. But accounting for inflation, prices are still about 20% below the records reached in 1981, when supplies became tight after a revolution in Iran and a war between Iraq and Iran.
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