Royal Dutch Shell Plc  .com Rotating Header Image

THE NEW YORK TIMES: Oil Prices Steady Near $70 a Barrel

Oil Prices Steady Near $70 a Barrel

Published: May 9, 2006

Filed at 7:45 a.m. ET

VIENNA, Austria (AP) — Crude-oil futures hovered around $70 a barrel Tuesday as persistent concerns over Iran's nuclear ambitions were tempered by expectations of rising U.S. gasoline stocks.

Oil prices have risen in recent weeks on anxiety that Iran, the No. 2 producer in the Organization of Petroleum Exporting Countries, could cut supplies because of international pressure to modify its nuclear program.

Light, sweet crude for June delivery slipped 3 cents to $69.74 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. June Brent crude futures on London's ICE Futures exchange rose 10 cents to $70.31 a barrel.

On Monday, a letter from Iran's leader to President Bush proposing ''new solutions'' to the tension eased market worries slightly, causing the price of Nymex crude to fall as low as $68.25 before settling at $69.77, down 42 cents.

''The talk about Iran trying to reach a compromise is very significant,'' said David Thurtell, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

Thurtell said oil prices could retreat to $63 to $65 a barrel if Iran and the West are able to reach a peaceful compromise.

''Unless (Iran is) being completely misleading, hopefully it is a watershed in what Iran tries to do. We could see about five to seven dollars leave the market — that's where oil prices would be had this issue not gathered momentum,'' he said.

Still, with the letter not addressing concerns about Iran's nuclear program, other analysts were less bullish.

Vienna's PVM Oil Associates focused on the widespread belief ''that this is just another well-timed strategic move by Iran,'' adding: ''The bearish effect is not likely to last long as the U.S. has already dismissed the letter as stating nothing new.''

And Fimat USA broker Mike Fitzpatrick, in a research note, cautioned: ''Don't be surprised if Iran starts using the playbook … of brinkmanship followed by reconciliation, followed by blame reversal, followed by brinkmanship.''

Other factors pushing up oil prices are unrest in Nigeria, violence in Iraq and rising resource nationalism in South America. Some 500,000 barrels per day of Nigerian production, most of it operated by Royal Dutch Shell PLC, remain off-line because of violence there, and more than 300,000 barrels per day remain shut down in the Gulf of Mexico since Hurricane Katrina battered offshore platforms in August.

Counterbalancing such worries were expectations that Wednesday's U.S. government petroleum inventories report will show U.S. gasoline stocks rose for a second straight week. That could ease concerns over a possible shortage during the peak summer driving season.

''Expectations (are) hovering at a plus of about 1.4 million barrels'' in the week ended May 5, said PVM. That was in line with a Dow Jones Newswires survey of energy analysts putting the expected stock build at 1.3 million barrels.

In other Nymex trading, gasoline futures and heating oil prices were essentially flat at $2.0037 a gallon and $1.9560 a gallon respectively. Natural gas futures fell just over 3 cents to $6.664 per 1,000 cubic feet.


Associated Press Writer Gillian Wong in Singapore contributed to this report.

This website and sisters,,,, and, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.