Oil prices jump on concerns over Iran, Nigeria

Crude oil prices jumped on Tuesday as Iran’s nuclear ambitions and an attack on an oil platform in Nigeria kept traders edgy over potential supply snags.

Light, sweet crude for February delivery rose 98 cents to $64,90 a barrel in Asian electronic trading on the New York Mercantile Exchange. The front-month contract on Friday dropped two cents to settle at $63,92 a barrel.

The market was closed on Monday in honour of Martin Luther King Day.

Heating oil gained 3,62 cents to $1,7512 a gallon (3,8 litres), while gasoline advanced 2,74 cents to $1,7585 a gallon.

Natural gas rose 5,4 cents to $8,845 per 1 000 cubic feet.

Analysts said energy futures jumped on concerns that the United Nations Security Council would consider sanctions against Iran because of its nuclear programme, and after Iran’s warning that any sanctions imposed could send oil prices even higher.

“The Iranian nuclear issue is driving the market. Traders are short-covering because they know if something happens in Iran, the market would be in confusion,” said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo.
“The issue poses a threat of supply disruption in a major oil-producing country.”

Russia and China on Monday joined the United States and its European allies in demanding that Iran fully abandon its nuclear programme.

The powers called for an emergency board meeting of the International Atomic Energy Agency on February 2 and 3 to discuss the issue.

The West fears Iran intends to build an atomic bomb, but Iran claims its programme is peaceful, intended only to produce electricity.

Iran is the Organisation of Petroleum Exporting Countries’ second-largest producer and sanctions targeting its oil and gas exports could disrupt the world’s energy markets.

Analysts also said another attack on an oil platform in Nigeria was supporting crude’s rise.

Heavily armed fighters attacked Royal Dutch Shell plc’s Benisede oil platform in the Niger Delta at dawn on Sunday, damaging the facility and killing at least one person in the third assault on its facilities in less than a week.

Shell says recent violence has caused its consortium to cut 106 000 barrels in daily crude production. Nigeria is Africa’s leading oil exporter and the fifth-biggest source of US oil imports. The country produces about 2,5-million barrels a day.—Sapa-AP

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