Crude oil prices pull back on sharp decline in natural gas |

Crude oil prices pull back on sharp decline in natural gas

LONDON – Oil prices pulled back Monday in sympathy with a sharp decline in natural gas futures.However, analysts said oil prices could resume their upward trend – they initially jumped above $69 a barrel – on supply fears linked to Iran’s standoff with the West over its nuclear ambitions and continuing unrest in oil-rich Nigeria.Light sweet crude for March delivery retreated 23 cents to $68.25 a barrel on the New York Mercantile Exchange. March Brent crude at London’s ICE Futures exchange fell 21 cents to $65.22 a barrel.Natural gas futures slid 73 cents, or 8 percent, to $8.55 per 1,000 cubic feet due to above-normal winter temperatures in the primary home-heating markets in the U.S.”Warm temperatures now forecast to persist on into early February undercut physical demand for heating fuels,” said analyst Tim Evans at IFR Energy Services in New York.Nymex February heating oil futures were flat at $1.867 a gallon, while gasoline fell slightly to $1.7947 a gallon.Naimi told India’s television news channel NDTV there is no fundamental reason for elevated oil prices given that there are enough supplies to meet the demand for oil.”The (oil market) fundamentals today are in an excellent shape … supply is plentiful and demand is well met by supply, so there’s no reason why prices should be rising,” he said.However, analysts said market participants remain concerned Iran’s dispute with the West over the restarting of its nuclear program could lead to supply disruptions in the second-largest oil producer within the Organization of Petroleum Exporting Countries, or OPEC.They also pointed to worries about Nigeria, where militants holding four expatriate oil workers have threatened to launch rocket attacks on crude installations in the oil rich Niger Delta.Such geopolitical worries, which have driven crude oil prices up at a time when global petroleum demand is high and the emergency supply cushion is thin, have overshadowed rising oil inventories and mild winter weather in the United States – factors that would normally depress prices.”The geopolitical drama over Iran and Nigeria is sending oil prices upwards,” said energy analyst Victor Shum of Purvin & Gertz in Singapore.The International Atomic Energy Agency’s board of governors will meet Feb. 2 to discuss whether to refer Iran to the Security Council after it broke U.N. seals at a uranium enrichment plant and said it was resuming nuclear research after a two-year freeze.Iran exports roughly 2.5 million barrels per day – 1 million barrels more than current excess production capacity worldwide.Oil jumped $1.52 to settle at $68.35 a barrel on Friday, the highest closing price since Sept. 1, just days after Hurricane Katrina made landfall.Crude oil prices reached a record high of $70.85 a barrel on Aug. 30.

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