AP: Crude oil prices rose Tuesday after Iran removed seals on its nuclear research facilities, allowing work to resume despite warnings from Western countries. Associated Press
SINGAPORE, (AP) – Crude oil prices rose Tuesday after Iran removed seals on its nuclear research facilities, allowing work to resume despite warnings from Western countries.
The move will increase pressure on Iran, a top oil producer, from Western nations that have called for it to cease nuclear activities until an agreement has been reached on the scope of its nuclear program.
Iran said its action was to prepare for fuel research only and that it was not resuming work to produce nuclear fuel.
Light, sweet crude for February delivery on the New York Mercantile Exchange gained 50 cents to $64.00 a barrel in electronic trading by midday in Europe. February Brent crude futures on London’s ICE Futures exchange rose 49 cents to $62.50 a barrel.
Heating oil was up less than half a cent to $1.7715 a gallon, while gasoline edged lower to $1.7665 a gallon.
While U.S. government data on fuel inventories due Wednesday are expected to show a drop in crude stocks, analysts said levels were still expected to remain higher than a year ago.
Analysts also expect that the data will show that stockpiles of heating oil and other distillate fuels have grown.
According to an average of estimates from 10 analysts polled by Dow Jones Newswires, distillate stocks _ which include heating oil and jet fuel _ were expected to jump about 1.7 million barrels last week. A rise of that size would push distillate stocks to just above the U.S. federal Energy Information Administration’s five-year average.
The predicted increase in heating oil stockpiles comes amid an expected decline in demand due to warmer weather, putting greater downward pressure on prices.
“There’s hardly any fundamental support underpinning the market. Stocks of crude and heating oil show growing surplus at a time when they should be pressured by peak demand,” said Mike Fitzpatrick, an analyst with Fimat USA Inc., in a note to clients.
The same estimates showed gasoline inventories rose about 1.1 million barrels on week, but remained about 2 percent below the EIA’s five-year average.
Warmer than usual weather in the United States has also been pressuring oil prices, analysts said.
In the U.S. Northeast, the world’s largest consumer of heating oil, temperatures climbed to spring-like levels on Monday, and forecasters expect those temperatures to continue through the week.
Natural gas futures gained nearly 3 cents to $9.387 per 1,000 cubic feet. The front-month contract was taking steps to recover from its nearly 40 percent plummet since Dec. 13, when it hit an all-time peak of $15.78 on fears of a cold winter and disrupted production in the Gulf of Mexico in the wake of Hurricane Katrina.