The Associated Press : Oil prices rebounded Tuesday as the market shifted its attention to Iran and other supply issues on signs that tropical storm Ernesto would avoid Gulf of Mexico oil facilities.
The Associated Press
LONDON — Oil prices rebounded Tuesday as the market shifted its attention to Iran and other supply issues on signs that tropical storm Ernesto would avoid Gulf of Mexico oil facilities.
Light sweet crude for October delivery increased 15 cents to $70.46 a barrel in European morning electronic trading on the New York Mercantile Exchange.
October Brent crude at London’s ICE Futures exchange gained 19 cents to US$71.01 a barrel.
The crude price fell as low as $70.15 a barrel on Monday before settling at $70.61, a drop of $1.90, on signs that Ernesto would likely bypass the eastern and central Gulf of Mexico, where most U.S. offshore oil and natural-gas facilities are located.
With that threat largely gone, traders turned their attention to Iran’s stand-off with the West over its nuclear program.
“With all the chatter over Ernesto, we seemed to have forgotten the other interesting and worrisome developments on the geopolitical front,” said Phil Flynn, an analyst at Alaron Trading Corp. in New York.
Traders are concerned that Iran, the world’s fourth-biggest oil producer, could block oil exports if the United Nations imposes sanctions over its nuclear program. Tehran faces a Wednesday deadline to halt uranium enrichment or face possible economic and diplomatic sanctions, but has so far refused any immediate suspension of its nuclear program.
“Moving in the international framework is not a matter of concern for us,” Iranian government spokesman Gholam Hossein Elham said Monday.
Iran is a leading global oil exporter and has made threats in recent months to choke off the Strait of Hormuz _ where some 20 percent of the world’s supply passes through every day _ in retaliation for sanctions.
Traders are also watching other possible threats to supply. The partial production shutdown at the giant Prudhoe Bay field in the U.S. state of Alaska is expected to make an impact on U.S. oil inventory statistics due Wednesday.
U.S. commercial crude stocks are expected on average to have fallen by 1.2 million barrels in the week to Aug. 25, a Dow Jones Newswires survey of eight analysts showed.
Gasoline inventories likely drew 900,000 barrels as the country approaches the end of the summer driving season, while distillate stocks, comprising heating oil and diesel, probably rose 1.2 million barrels, the survey showed.
In other Nymex trading, natural gas futures declined 21.1 cents to $6.261 per 1,000 cubic feet, while gasoline futures rose marginally to $1.7975 a gallon, and heating oil futures rose 0.131 cent to $1.9790 a gallon.
