US-Iran stand off keeps oil price above $72/barrel
Oil fell nearly $1 on Friday on profit-taking by fund investors after a rally to record highs.india Updated: Apr 21, 2006 10:58 IST
Oil fell nearly $1 on Friday on profit-taking by fund investors after a rally to record highs, though prices held above $72 on tension over Iran's nuclear programme and other supply disruption worries.
US oil for new front-month June traded 75 cents lower at $72.94 a barrel by 0419 GMT, after hitting a new front-month record of $73.50.
London Brent slid 67 cents to $72.51, after touching a record of $74.22 on Thursday.
"Traders and investors alike both succumbed to the temptation to take profits in a variety of commodities that have made big price gains," said David Thurtell of the Commonwealth Bank of Australia.
Supply sentiment has improved after Royal Dutch Shell said it expected to restart a key US oil and gas field in the Gulf of Mexico by end-May, ahead of plan. The 140,000 barrel-per-day (bpd) Mars platform was damaged by Hurricane Katrina last year.
Crude stocks in the United States edged down last week from a near eight-year high, but prices had rallied after the US government reported a larger-than-expected decline in gasoline inventories, a seventh draw that put them nearly 5 per cent below last year's level.
A war of words between Iran and the West over Tehran's resolve to continue its nuclear programme have also pushed prices up as analysts fear the dispute could escalate, disrupting shipments from the world's fourth-biggest exporter.
Disruptions to Nigerian supplies continue with almost a quarter of the OPEC member's output cut after militant attacks.
The volume of OPEC oil to be shipped fell 390,000 bpd in the four weeks to May 6, as Asian refiners cut imports ahead of a heavy maintenance season, an oil shipping analyst said on Thursday.
The oil cartel seems powerless to bring down prices, as it is already pumping close to its limits, though ministers will take the opportunity to hold informal discussions on April 24 during a meeting of the International Energy Forum in Doha.
The world's energy consumers and producers will meet in Qatar from Saturday to explore ways or bringing down record prices, but few expect a quick fix.
"PFC Energy forecasts a mixed picture on fundamentals to send prices to new highs in 2006 and 2007 as tight production and refining capacity remains relatively unchanged," said Bakhtiar Talhah of consultancy PFC Energy.