Thursday, March 29, 2007
Oil up $1 after brief spike on Iran rumour
LONDON: Oil held at $64 on Wednesday, with traders still rattled by
a $5 spike overnight on a rumour, quickly dismissed by the United States,
that a US naval vessel had clashed with Iran.
Britain denied another market rumour that it had sent troops to
release 15 British military personnel being held in Iran.
"Although it didn't happen this time, people think it could happen,"
said Christopher Bellew of oil brokers Bache Financial.
Oil's surge to $68.09, its highest since September 6, highlighted
the market's anxiety over supplies from the Gulf and in particular Iran,
the world's fourth-biggest exporter, which is at odds with the United
Nations over its nuclear programme. Tehran's detention of 15 British
sailors has raised the tension still further.
"The market has been on pins and needles with the Iran situation and
as soon as the rumour mill got started things took off," said Phil Flynn
of Alaron Trading.
US crude soared in electronic after-hours trade on Tuesday. It stood
at $64.00, up $1.07 from Tuesday's settlement of $62.93 determined before
the rumours took hold. London Brent crude was up 98 cents at $65.58 a
barrel, extending a six-day rally that has added about 10 percent to
prices, pushing them nearer the danger zone for consumer nations who fear
they could stymie economic growth.
"Oil prices surging above $68 was a temporary phenomenon but it
shows that the market is on high alert for geopolitical factors," said
Takeda Makoto, analyst at Bansei Securities. US officials knocked down any
talk of military action.
The rumours come just as a second US aircraft carrier moved into the
Gulf to carry out military exercises. Iran's navy began a week of
exercises in the Gulf last Thursday.
"We have no information at this time that indicates any incident
taking place," said White House National Security Council spokesman Gordon
Johndroe.
British Prime Minister Tony Blair on Tuesday warned Iran that
diplomatic efforts to free the sailors and marines could give way to a
"different phase" if they were not released. Iran has said it may charge
them with illegally entering its waters. So far there has been no
disruption to Iran's daily shipments of around 2.2 million barrels.
US data: Weekly US fuel data later on Wednesday is likely to show a
seventh-straight fall in gasoline stocks in the world's biggest consumer
as it prepares for peak summer demand.
Analysts are forecasting a 1.8 million-barrel gasoline draw for the
week ending March 23, along with a 1.6 million-barrel rise in crude stocks
and a 1.2 million-barrel draw in distillates, a Reuters poll showed. A
strike by workers at the French Mediterranean oil terminal Fos-Lavera,
entering its third week, has begun to hit refinery output. Offsetting the
supportive fundamental picture, US economic data painted a darkening
picture, with consumer confidence weakening in March and US single-family
home prices registering their first annual decline in more than a decade.
reuters
http://www.dailytimes.com.pk/default.asp?page=2007%5C03%5C29%5Cstory_29-3-2007_pg5_20
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