Oil prices fall, but markets are tense over Iran’s nuclear ambitions | VailDaily.com

Oil prices fall, but markets are tense over Iran’s nuclear ambitions

Crude oil futures fell marginally on Friday, ending the week slightly lower as above-normal temperatures in parts of the U.S. helped ease supply concerns. But the market remained worried about oil-rich Iran, which threatened to block inspections of its nuclear sites if confronted by the U.N. Security Council.Light sweet crude for February delivery dropped 2 cents to settle at $63.92 a barrel in a shortened trading session on the New York Mercantile Exchange, which will be closed Monday in honor of Martin Luther King Day. Last Friday, Nymex crude settled at $64.21.In London, February Brent crude futures fell 36 cents to close at $62.26 a barrel on London’s ICE Futures exchange.”There is no short term supply pressure in the market,” said Antoine Halff, director of global energy at Eurasia Group in New York.However, Halff noted that there is a significant premium to be paid for oil futures delivered further out in the year – a market condition known as “contango” – and that it signals “longer term concerns about Iran, security and other geopolitical risks.”On Friday, Iran, the world’s fourth-largest oil producer, vowed to end all voluntary cooperation with the U.N. nuclear watchdog if it is referred to the Security Council for possible sanctions over its controversial nuclear program.Foreign ministers of Germany, Britain and France said Thursday that nuclear talks with Iran had reached a dead end after more than two years of acrimonious negotiations and the issue should be referred to the U.N. Security Council.Balmy weather in the U.S. Northeast, a key heating oil market, helped offset those geopolitical concerns. Heating oil and natural gas prices have been under pressure due to U.S. government reports hinting at weak demand last week.On Friday, heating oil on the Nymex gained 0.3 cent to $1.715 a gallon, while gasoline rose 1.26 cent to $1.7311 a gallon.Natural gas futures, which on Thursday settled below $9 per 1,000 cubic feet for the first time in nearly five months, extended their losses Friday as they fell 15.2 cents to settle at $8.791 per 1,000 cubic feet.”Natural gas pricing is an immediate telltale sign of the winter situation: it is fairly mild, and this is likely to impact heating oil and crude demand as well,” said analyst Victor Shum of Purvin & Gertz in Singapore.Natural gas hit an all-time peak of $15.78 on Dec. 13 on concerns of a potentially cold winter and disrupted production in the Gulf of Mexico in the wake of Hurricane Katrina.The latest federal data show that 18 percent of daily natural gas production in the Gulf remains shut, and that 26 percent of daily oil output is still down.—AP Business Writer Brad Foss in Washington contributed to this report.Vail, Colorado

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