/ 22 April 2006

Oil prices rise above $75 a barrel

Crude oil futures closed above $75 a barrel in New York for the first time on Friday, amid increasing concerns about the Iranian nuclear crisis and a United States gasoline-supply crunch.

The June contract for light sweet crude closed at $75,17 a barrel after rising as high as $75,35.

In London, the contract for Brent North Sea crude also hit a historic high of $74,78 a barrel ahead of the close.

The market is fraught with fears that the US might launch strikes at uranium facilities in Iran, which is the world’s fourth-biggest crude producer. At the same time, worries are growing over US gasoline-supply shortages.

Any action against Iran — the second-biggest member of the Organisation of Petroleum Exporting Countries (Opec) after kingpin Saudi Arabia — could disrupt the country’s exports.

Opec energy ministers planned to meet in Qatar on Saturday to discuss the latest developments in the oil market, the United Arab Emirates energy minister said on Friday.

Opec members, meeting on the sidelines of the World Energy Forum in Doha, would only discuss market prices and not take action on production levels, Energy Minister Mohammed Dhaen al-Hamili said.

”Opec does not interfere with prices. Its role is mainly to ensure flow of adequate supply of raw oil into the oil market,” the official Emirates news agency quoted al-Hamili as saying. ”Currently there is no shortage in supply.”

Al-Hamili said the cartel, which pumps about a third of the world’s oil and has an output quota of 28-million barrels a day, ”will hold an extraordinary meeting in Caracas next June to discuss the situation in the oil market and take appropriate action”.

Al-Hamili attributed the current price hike to disturbances in some production areas and lack of refining capacity in consumer countries.

”More investments should be pooled into the oil-producing sector in order to enhance production capacities of producers and build more refineries,” he said.

Rebels disrupting oil production in southern Nigeria could pose another threat to world supplies. — Sapa-AP, Sapa-AFP