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Oil prices up as Iran tension mounts

World energy prices have risen owing to a crisis over oil-rich Iran's nuclear ambitions and a fall in US crude stockpiles.

india Updated: Jan 12, 2006 09:09 IST

World energy prices have risen owing to a crisis over oil-rich Iran's nuclear ambitions and a fall in US crude stockpiles, traders said.

New York's main oil contract, light sweet crude for delivery in February, hit a high of $64.80 a barrel before closing 57 cents up at $63.94 dollars on Wednesday.

In London, the price of Brent North Sea crude for February delivery added 25 cents to end at $62.17 a barrel.

"The market is unusually strong especially given the fundamentals it has to work with. I do think that the continued deterioration of the situation in Iran is having some impact on the market," AG Edwards analyst Bill O'Grady said on Wednesday.

Iran's resumption of nuclear research activities after a two-year suspension prompted warnings from world powers that OPEC's second-biggest oil exporter could be referred to the UN Security Council.

Analysts said weekly figures from the Department of Energy giving inventory levels for US energy stocks were also a factor in driving up prices.

"The storage numbers were generally a little bullish for crude but pretty bearish for products," O'Grady said.

The Department of Energy said crude inventories fell 2.9 million barrels to total 318.7 million in the week ended January 6.

Oil traders had expected a smaller drop of 6,00,000 barrels, owing to increased refinery activity.

First Published: Jan 12, 2006 09:09 IST