Oil hits 2007 high on Iran tensions

SYDNEY – Oil rose to near US$63 yesterday, setting a fresh 2007 record, on heightened geopolitical tensions between Iran and the West after Tehran vowed to continue its atomic programme despite new UN sanctions.

US crude oil futures hit a three-month high of $62,79 a barrel and were up 45 cents at $62,73 a barrel by 0716 GMT, extending gains for a fourth session. London Brent crude was up 52 cents.Iran said on Sunday it would not stop its atomic programme, which it insists is only for peaceful purposes, and that it would limit cooperation with the UN’s nuclear watchdog in retaliation for new financial and arms sanctions.The West fears the programme could be used to develop nuclear weapons.Although the West has been locked in a protracted dispute with Iran over its nuclear ambitions, the latest developments have renewed market concerns that the world’s fourth-largest oil exporter could one day cut its oil exports to strike back at the West if the relations worsened, analysts said.”The situation in the Middle East has become much more uncertain and the risk of tensions intensifying has underpinned the rise in oil prices and will continue to support prices,” said David Moore, an analyst at Commonwealth Bank of Australia.The UN Security Council unanimously approved the sanctions on Saturday for Tehran’s refusal to suspend its programme, but major powers also offered new talks and renewed an economic and technological incentive package offer.Concern that civil unrest may intensify in Nigeria ahead of April elections has also supported oil prices, analysts say.Oil has risen about 25 per cent since crude oil futures hit a 20-month low of $49,90 in mid-January, a rebound led lately by falling petrol inventories ahead of the US summer driving season, when demand peaks in the world’s top consumer.Although some analysts say an early end to seasonal refinery maintenance may help boost supplies before demand picks up, petrol futures held near the over seven-month high they touched on Friday.Oil prices would remain steady in a range of $55-$60 a barrel this year because of “persistent factors” including geopolitical tensions and a cold wave in Europe and the United States, Algerian government-run newspaper quoted Mines and Energy Minister Chakib Khelil as saying on Saturday.Nampa-ReutersLondon Brent crude was up 52 cents.Iran said on Sunday it would not stop its atomic programme, which it insists is only for peaceful purposes, and that it would limit cooperation with the UN’s nuclear watchdog in retaliation for new financial and arms sanctions.The West fears the programme could be used to develop nuclear weapons.Although the West has been locked in a protracted dispute with Iran over its nuclear ambitions, the latest developments have renewed market concerns that the world’s fourth-largest oil exporter could one day cut its oil exports to strike back at the West if the relations worsened, analysts said.”The situation in the Middle East has become much more uncertain and the risk of tensions intensifying has underpinned the rise in oil prices and will continue to support prices,” said David Moore, an analyst at Commonwealth Bank of Australia.The UN Security Council unanimously approved the sanctions on Saturday for Tehran’s refusal to suspend its programme, but major powers also offered new talks and renewed an economic and technological incentive package offer.Concern that civil unrest may intensify in Nigeria ahead of April elections has also supported oil prices, analysts say.Oil has risen about 25 per cent since crude oil futures hit a 20-month low of $49,90 in mid-January, a rebound led lately by falling petrol inventories ahead of the US summer driving season, when demand peaks in the world’s top consumer.Although some analysts say an early end to seasonal refinery maintenance may help boost supplies before demand picks up, petrol futures held near the over seven-month high they touched on Friday.Oil prices would remain steady in a range of $55-$60 a barrel this year because of “persistent factors” including geopolitical tensions and a cold wave in Europe and the United States, Algerian government-run newspaper quoted Mines and Energy Minister Chakib Khelil as saying on Saturday.Nampa-Reuters