Oil rallies as political fears outweigh stock

SINGAPORE – Oil rose to US$67 on Friday, recovering some of the week’s losses as traders focused on supply worries in major producers, despite a healthier stock cushion in top consumer the United States.

US light crude was up 74 cents to US$67 a barrel by 0706 GMT, adding to Thursday’s 41-cent gain. London Brent crude climbed 68 cents to US$65,60 a barrel.Prices had pulled back from over US$69 on Monday – the highest level since early September – as top exporter Saudi Arabia said it would fill any supply gap and US government data this week showed rising fuel stocks.”The US inventory data clearly worried the market, but the Iranian and Nigerian situations are providing support to prices,” said Tobin Gorey of the Commonwealth Bank of Australia.As reduced production in Nigeria and tension over Iran’s nuclear programme underpin prices, the Organisation of the Petroleum Exporting Countries is expected to keep current output unchanged when it meets tomorrow, despite high levels of prompt supply.”The next important meeting for the oil market will not be Opec but the International Atomic Energy Agency,” said Gorey.The United States and its European Union allies have said it is time for the International Atomic Energy Agency (IAEA), which meets on February 2, to turn Iran’s nuclear dossier over to the UN Security Council, though China and Russia have urged caution.Despite analysts’ fears of Iran using oil for leverage, Opec President Edmund Daukoru said on Thursday that Iran was unlikely to completely halt its exports of around 2,4 million barrels per day (bpd) in a dispute.- Nampa-ReutersLondon Brent crude climbed 68 cents to US$65,60 a barrel.Prices had pulled back from over US$69 on Monday – the highest level since early September – as top exporter Saudi Arabia said it would fill any supply gap and US government data this week showed rising fuel stocks.”The US inventory data clearly worried the market, but the Iranian and Nigerian situations are providing support to prices,” said Tobin Gorey of the Commonwealth Bank of Australia.As reduced production in Nigeria and tension over Iran’s nuclear programme underpin prices, the Organisation of the Petroleum Exporting Countries is expected to keep current output unchanged when it meets tomorrow, despite high levels of prompt supply.”The next important meeting for the oil market will not be Opec but the International Atomic Energy Agency,” said Gorey.The United States and its European Union allies have said it is time for the International Atomic Energy Agency (IAEA), which meets on February 2, to turn Iran’s nuclear dossier over to the UN Security Council, though China and Russia have urged caution.Despite analysts’ fears of Iran using oil for leverage, Opec President Edmund Daukoru said on Thursday that Iran was unlikely to completely halt its exports of around 2,4 million barrels per day (bpd) in a dispute.- Nampa-Reuters