Oil prices pulled back below $63 on Wednesday after rising more than $2 a barrel on the previous day amid speculative buying.
Light, sweet crude for February delivery was down 16 cents to $62,98 a barrel on the New York Mercantile Exchange in Asian electronic trading, on Wednesday morning in Singapore. Heating oil dipped slightly to $1,7925 a gallon (3,8 litres), while gasoline dropped one cent to $1,74 a gallon.
Natural gas futures fell 22 cents to $10,40 per 1 000 cubic feet following Russia’s efforts to ensure gas supply despite a pricing dispute with Ukraine. On Tuesday, European buyers of Gazprom’s natural gas said they had started receiving full supplies after the Russian monopoly increased shipments through Ukraine.
Gazprom halted deliveries to Ukraine on Sunday because Kiev had refused to meet its demands for a fourfold price increase. About one-quarter of Europe’s gas comes from Russia, and the stand-off raised fears of serious gas shortages as Europe suffers through a particularly cold winter.
Analysts attributed the big jump in oil prices on Tuesday partly to cold rain and snow in the United States North-East, and a declaration from a top Iranian official that Tehran will resume research into nuclear fuel production, a comment that raised concerns about the country’s nuclear weapons ambitions.
Mohammad Saeedi, deputy head of the Atomic Energy Organisation of Iran, said research would ”resume in cooperation and coordination” with the UN nuclear watchdog in the next few days.
Some investors looking for better returns than US stock markets have delivered in the past year are piling into energy futures, creating unusually high demand for crude oil, gasoline and heating oil contracts.
Oil futures finished 40% higher than they started in 2005, reaching a peak of $70,85 per barrel on August 30 after Hurricane Katrina damaged Gulf of Mexico production platforms.
Many analysts believe the average price of oil will be below $60 in 2006, but not by much as US and Chinese economic growth continues and Organisation of Petroleum Exporting Countries members eye a production cut. — Sapa-AP