LONDON, 18 January 2006 — World oil prices raced past three-month highs yesterday, breaching $65 in New York and $64 in London on rising supply concerns over Iran and Nigeria, dealers said.
New York’s main contract, light sweet crude for delivery in February, jumped $1.56 to $65.48 per barrel in pit dealing. It had earlier climbed to $65.53 — the highest intra-day level since Oct. 3, 2005.
In London, the price of Brent North Sea crude for March delivery soared $1.08 to $64.26 per barrel in electronic deals. The February contract had expired Monday at $62.93 per barrel.
Earlier yesterday, the March contract reached $64.43, the best level since Sept. 29 last year. In yesterday trade “both Brent and New York light crude futures were higher as concern about Iran’s restarted nuclear enrichment program and the supply problems from Nigeria” continued, analysts at the Sucden brokerage said.
While the UN standoff with Iran would take time to unfold, attacks on oil facilities in Nigeria were a pressing concern, according to Fimat analyst Mike Fitzpatrick. “Nigeria has a more direct link to prices, supply has actually been curtailed,” he said.
Nigerian separatists warned Anglo-Dutch oil giant Shell and other foreign oil companies yesterday to leave southern oil-rich Niger-Delta or face action.
The past week has seen unrest in the southern region where armed gangs have kidnapped four foreign oilmen working for Shell and sabotaged an oil pipeline, costing the firm over 200,000 bpd. Nigeria is the world’s sixth-biggest crude exporter.
Crude futures have gained around 5.0 percent since the start of 2006, driven by geo-political concerns, particularly regarding Nigeria and Iran.
Europe’s leading nations were pressing for an emergency meeting of the UN atomic watchdog over Iran’s nuclear program, amid signs that Tehran may yet agree to a compromise proposal from Russia.
After talks in London on Monday that also included officials from China, Russia and United States, the EU troika of Britain, France and Germany said it wanted the International Atomic Energy Agency (IAEA) to meet on Feb. 2-3. Investors fear that economic sanctions against Iran might prompt the oil-rich nation to call a halt to its crude exports.
Iran exports some 2.7 million barrels per day of crude, mainly to Asian and European countries. Traders were also absorbing the International Energy Agency’s monthly review of the oil market.
Demand for oil in China and the United States will drive a 2.2-percent increase in global oil consumption this year and an anticipated seasonal fall in demand in the second quarter looks uncertain, the IEA said yesterday.
The agency also said that it had revised down its forecast for growth of demand for oil in 2005 to 1.3 percent from a previous estimate of 1.4 percent.
In 2006, global oil consumption is forecast to average 85.1 million barrels per day, an additional 1.8 mbd compared with 2005, the IEA said.
