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Oil Climbs Back Towards $62
After Steep Fall
Bryan Bender
Reuters
Monday April 9, 2007
Oil rose towards $62 on Tuesday, interrupting six straight days
of losses, as market attention shifted to Iran's nuclear program
and a likely drop in gasoline stocks in top consumer the United
States.
Price falls began on March 30 and gathered pace last week when
Iran released 15 British sailors and marines, wiping more than $4
off a barrel of U.S. crude.
At 0838 GMT U.S. crude (CLc1) was up 12 cents at $61.63, after
tumbling $2.77 or 4.3 percent on Monday. London Brent crude (LCOc1)
was up 15 cents at $66.78, recovering from a $1.65 loss in Monday
trade subdued by the Easter holiday.
``The resolution of the dispute over Iran's seizure of British
military personnel has seen the risk premium that had been embodied
in the crude oil price wound back,'' David Moore, commodity Strategist
at Commonwealth Bank of Australia, said.
``However, the potential for further tension involving Iran remains
high.''
Iranian President Mahmoud Ahmadinejad announced on Monday his country
had begun the first stage of what it calls industrial-scale uranium
enrichment, which the West fears could be used to make nuclear weapons.
Iran says it wants the fuel for generating electricity so it can
export more of its oil and gas.
Brent, a marker for the cost of Europe's imports, has reached a
record premium to U.S. crude of more than $5 a barrel, reflecting
high supplies at the United States' key Cushing, Oklahoma hub. Brent
is also more sensitive to developments in the Middle East because
of proximity.
OPEC oil ministers said high prices reflected tension between Iran
and the West rather than any shortage of oil.
OPEC President Mohammed al-Hamli said the market was very well
supplied, while Iran's oil minister Kazem Vaziri-Hamaneh pointed
to OPEC's 1.7 million barrels per day supply cuts, agreed last year,
as having balanced the market.
Barclays Capital technical analysts said U.S. crude had tested
support at $61.35 in Monday's sell-off.
``The short term risk remains lower with the potential for a push
toward the pivotal 58.80/59.20 support zone before a more meaningful
base. However, bigger picture, price action remains in a bull trend,
with higher highs likely later in the month,'' they wrote in a research
note.
U.S. GASOLINE
Traders are closely watching gasoline supplies in the U.S., the
world's top consumer, prior to the peak summer driving season. Stocks
of the motor fuel have dropped nearly 10 percent since early February
amid refinery outages.
A Reuters poll of analysts forecast U.S. government data due on
Wednesday will show gasoline stocks fell 1.2 million barrels and
crude inventories rose 1.6 million barrels last week, as refinery
glitches limited output (EIA/S).
China also showed its insatiable demand for oil. The world's number-two
consumer imported 8.9 percent more crude in March from a year earlier
to reach a near record, official data showed on Tuesday, as refiners
geared up for a spring demand boost from farmers and construction
work.
INFOWARS:
BECAUSE THERE'S A WAR ON FOR YOUR MIND
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