Crude oil prices rise above $67 a barrel on geopolitical concerns
Crude oil futures climbed back above $67 a barrel Friday on nagging supply fears linked to Iran’s nuclear standoff with the international community and militant attacks in Nigeria, Africa’s largest oil exporter.Adding to the bullish tone, Saudi Arabia’s oil minister Ali Naimi said prices are unlikely to fall in the near term and OPEC’s president suggested the global economy could live with $60 a barrel.Light sweet crude for March delivery gained $1.50 to settle at $67.76 a barrel on the New York Mercantile Exchange. March Brent crude futures on London’s ICE Futures exchange rose 95 cents to $65.87 a barrel.Heating oil gained 2.89 cents to $1.8069 a gallon, while gasoline futures advanced by 5.21 cents to settle at $1.7364 a gallon.”Geopolitical tensions remain in Iran and Nigeria,” said Victor Shum, energy analyst at Purvin & Gertz in Singapore. “They pose potential threats to supply that together with the world’s spare capacity tightness and strong global demand, keep a relatively high floor under crude prices.”Naimi said prices are not likely to drop in the near term even though supply and demand are balanced.”I have no control over prices. We accept that they’re high, and of course, we want them to come down,” Naimi said in New Delhi, where he is visiting as part of a state delegation.His remarks come ahead of a closely watched meeting of the Organization of Petroleum Exporting Countries in Vienna on Tuesday.OPEC president Edmund Daukoru, asked at the World Economic Forum meeting in Davos, Switzerland, whether the global economy could live with crude oil prices at $60 barrel, replied: “I honestly think it can.””OPEC is committed to supplying the market at a reasonable price,” Daukoru said. “Of the two, we’re more committed to supplying the market and keeping it stable. I can’t fix the price.”Markets were also concerned about the dispute between Iran – the second-largest oil producer in OPEC – and the West over the restarting of its nuclear program. Iran insists the program is aimed at generating electricity, while the U.S. and several European countries fear it could lead to nuclear weapons.In Nigeria, four foreign oil workers were kidnapped at a Royal Dutch Shell PLC oil platform in the Niger Delta on Jan. 11. Militants who say they are holding the men are demanding the release of two tribal leaders and for Shell to pay local communities $1.5 billion in compensation for oil pollution.The kidnappings came amid a spate of attacks on oil installations Nigeria that have forced companies to evacuate hundreds of their workers and cut 10 percent of the country’s daily oil output.Meanwhile, natural gas futures rose 17.1 cents to $8.40 per 1,000 cubic feet. On Thursday, natural gas fell 23.1 cents to settle at $8.229 – its lowest level in almost six months, after U.S. government data showed domestic inventories were well above the five-year average for this time of year.Above-normal winter temperatures in the U.S. have helped moderate demand, soothing a market that had otherwise been jittery because 16 percent of daily natural-gas production in the Gulf of Mexico remains shut-in nearly five months after Hurricane Katrina ripped through the region, knocking out platforms, pipelines and processing plants.—AP Business Writer Brad Foss in Washington contributed to this report. Gillian Wong reported from Singapore.