Oil prices climb on concerns over Iran, Iraq Oil prices climb on concerns over Iran, Iraq
Saturday, June 10, 2006
LONDON, June 10 - According to AFP, world oil prices climbed as concerns resurfaced over tensions in crude-producing countries Iran and Iraq, dealers said.
New York's main contract, light sweet crude for delivery in July, rose by 36 cents to 70.71 dollars per barrel in electronic deals before the official opening of the US market.
In London, Brent North Sea crude for July delivery added 58 cents to $69.63 per barrel in electronic trading.
Crude futures had slid on Thursday after news of the killing of Al-Qaeda's chief in Iraq, Abu Musab al-Zarqawi, but worries over Iran limited the falls.
Zarqawi, who had orchestrated a bloody campaign of attacks and beheadings in Iraq, was killed Wednesday in an air strike near the restive city of Baquba.
"We still feel that the death of al Qaeda's leader will not provide a solution to a country that is not only fighting insurgents, but its own people," said Sucden analyst Sam Tilley.
Owing to persistent violence and sabotage, Iraq struggles to produce around 2.0 mln barrels of oil per day, which is below the 2.5 mln it produced before the US-led invasion of the country in March 2003.
"News that Iran has launched a fresh programme of uranium enrichment this week, just as the West has offered it incentives to stop, has also supported the market," Tilley added.
Iran accelerated uranium enrichment on the same day this week that world powers asked it to halt the work and open talks to guarantee it will not make nuclear weapons, the International Atomic Energy Agency said Thursday in a report obtained by AFP.
Iran stepped up enrichment on June 6, the same day European Union foreign policy chief Javier Solana visited Tehran to present a package of benefits to be discussed if Iran would suspend uranium enrichment, which makes nuclear reactor fuel or in highly refined form atom bomb material, the report said.
The report appeared to dash hopes Iran was preparing an immediate pause in its nuclear fuel activities in order to start talks with six major powers on guaranteeing its program is peaceful.
"The Iranian situation will linger in the background and continue to support price at high levels," said Victor Shum, an analyst with energy consultancy Purvin and Gertz.