Crude oil rose for a fourth day on concern that the dispute over Iran's nuclear program may disrupt Middle East supplies.
The US and European nations will meet today to start work on a second sanctions resolution against Iran, the Middle East's second largest oil exporter, to stop its nuclear research program. A snowstorm is forecast to dump 7 inches of snow on New York City and the Northeast, a region that accounts for the majority of US heating oil demand. „The market's attention is returning to focus on geopolitical risks led by Iran,” Akio Shibata, deputy director at Marubeni Research Institute in Tokyo, said in an interview „The cold snap continuing in the US northeast is also helping support prices.”
Crude oil for April delivery gained as much as 45 cents, or 0.7%, to $61.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $61.47 at 1:23 p.m. Singapore time. Brent oil for April settlement rose as much as 49 cents, or 0.8%, to $61.37 a barrel on London's ICE Futures exchange. It was at $61.29 a barrel at 1:22 p.m. Singapore time. Crude oil surged to a record $78.40 a barrel in New York on July 14 partly because of violence in the Middle East and concern that Iran's defiance of United Nations nuclear inspectors might disrupt the nation's exports.
The five permanent members of the UN Security Council plus Germany will gather in London today to start work on a second sanctions resolution against Iran's nuclear program. „Prices may range between $59 and $63, led by concern about supplies from Iran,” said Kaname Gokon, deputy manager of the research section at Okato Shoji Co. in Tokyo.
The International Atomic Energy Agency, the UN nuclear watchdog, said on February 22 that Iran plans to install 3,000 centrifuges designed to produce nuclear fuel at its underground facility in Natanz, south of Tehran, by May. Iran's President Mahmoud Ahmadinejad on February 25 vowed his country's nuclear program will not be stopped, comparing its progress to „a train with no brakes.” US Vice President Dick Cheney said on February 24 that „all options are still on the table” to halt the country's atomic aspirations.
US fuel inventories may drop as refineries shut for maintenance during late February and March when heating oil demand wanes and gasoline use has yet to increase. Fires and interrupted power supplies trimmed output at refineries in Texas, Pennsylvania, Colorado, Ontario and Delaware over the past two weeks. Valero Energy Corp.'s McKee refinery in Texas was closed on February 16 because of a fire.
It will be several weeks before a resumption of operations, a spokeswoman said February 20. The plant has 170,000 barrels a day of processing capacity. Gasoline consumption over the past four weeks has averaged 9.1 million barrels a day, 3.6% higher than a year earlier, according to the department, which tracks shipments from refineries, pipelines and terminals to calculate demand.
In Nigeria, militants have stepped up attacks against oil facilities and oil workers over the past year. The Movement for the Emancipation of the Niger Delta said on February 21 it planned to wage a „full-scale” war against the Nigerian government and oil companies. (Bloomberg)