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Written by: Staff

SINGAPORE, Apr 18 (Reuters) U.S. oil stood within half a dollar of a record high on Tuesday, holding resolutely above $70 a barrel as fears grew of possible military action against Iran and a major Nigerian supply outage dragged into a third month. U.S. May crude oil futures rose 6 cents to $70.46 a barrel by 0217 GMT, adding to Monday's $1.08 gain to stand at the highest since Hurricane Katrina battered the U.S. Gulf Coast in late August last year, sending prices to a $70.85 record high.

London's Brent crude climbed to yet another all-time high, the sixth consecutive day it has scaled new peaks, adding 20 cents to $71.66 a barrel.

Oil prices have soared about $10 or 16 percent over the past four weeks, buoyed by a fresh infusion of fund investment amid mounting concern over Iran's stand-off with the West and the possibility of U.S. military action.

Former Iranian President Akbar Hashemi Rafsanjani said on Monday that Iran, which announced last week that it had enriched uranium for use in power stations, would continue to pursue its nuclear programme. The West fears it is trying to build an atomic bomb.

''The reality is that if there was any attack on Iran, there would certainly be a major disruption to supplies,'' said Gerard Burg, an economist at the National Australia Bank.

The United States, which will meet with world powers on Tuesday to consider targeted sanctions against Iran, said it wanted the U.N. Security Council to be ready to take strong diplomatic action, including measures such as a freeze on assets and visa curbs.

The United States already has a broad range of sanctions on Iran.

''We're kind of sanctioned-out at this point. We're down to pistachios and rugs,'' U.S. State Department spokesman Sean McCormack said in Washington on Monday.

The Security Council has told Iran to halt all sensitive atomic activities and on March 29 asked its nuclear watchdog, the Vienna-based International Atomic Energy Agency, to report on Iranian compliance in 30 days.

NIGERIAN DISRUPTIONS CONTINUE Worries over the prolonged shut-in of more than 500,000 barrels per day (bpd) in OPEC producer Nigeria because of militant action have also supported oil prices, which are nearing the inflation-adjusted peaks of over $80 hit back in 1980.

''I don't see any rapid resolution in Nigeria, it's a political situation,'' Burg said.

The disruption to nearly a quarter of Nigeria's high-quality crude output -- off-line since mid-February -- will become more critical as the U.S. driving season begins next month.

''Nigerian crudes are rich in gasoline, unlike crudes from Saudi Arabia and the Middle East, which are sour, heavier and harder to process,'' said Tetsu Emori, chief commodities strategist with Mitsui Bussan Futures.

Ministers from the Organization of the Petroleum Exporting Countries, who will gather informally this weekend during an International Energy Forum meeting in Doha, have said there is nothing more the group can do to calm the markets.

''We are already producing at maximum output,'' Qatar Oil Minister Abdullah al-Attiyah said. ''There is no shortage in supply.'' REUTERS CS HS0921

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