Oil prices continue rise on high fuel demand

LONDON - Oil prices continued to rise on Thursday on concern about possible supply disruptions as a UN deadline on Iran’s nuclear program arrived and a potential strike by some Nigerian oil workers.

By (AP)

Published: Thu 31 Aug 2006, 7:36 PM

Last updated: Sat 4 Apr 2015, 1:05 PM

Light sweet crude for October delivery increased 65 cents to US$70.68 a barrel in morning European electronic trading on the New York Mercantile Exchange. Brent crude on London’s ICE futures exchange rose 45 cents to US$70.63 a barrel.

Thursday marks the United Nations’ deadline for Iran to halt enrichment of uranium, which can be used in the production of nuclear weapons. If Tehran doesn’t comply, the UN could impose economic and diplomatic sanctions. Iran, the second-largest producer among the Organization of Petroleum Exporting Countries, could in retaliation restrict its oil exports.

UN and European officials said Wednesday that Iran persisted in enrichment until at least Tuesday.

Meanwhile, a possible strike by oil workers looms in Nigeria, Africa’s largest crude producer.

On Wednesday, Nigeria’s two main oil-workers’ unions met to decide whether to strike in protest at a member’s death. Nelson Ujeya, employed by Royal Dutch Shell, died Aug. 20 when the military fired on a boat carrying him to freedom after weeks of being held in captivity by rebels. In all, 12 people died in the incident.

Nigeria is Africa’s largest crude producer and the fifth-largest supplier of oil to the US Militant attacks and kidnappings in the southern Niger Delta region have cut production by a quarter this year so far.

In other Nymex trading, gasoline futures rose 1.81 cent to US$1.820 a gallon and heating oil futures were up 1.54 cent to US$1.9650 a gallon. Natural gas futures slipped 3 cents to US$6.260 per 1,000 cubic feet.

The rise in oil prices comes even though the US Department of Energy said Wednesday that US crude inventories rose 2.4 million barrels to 332.8 million barrels in the week ended Aug. 25, or 6.2 percent above year-ago levels. Gasoline inventories rose 400,000 barrels to 206.2 million barrels, or 4.6 percent above last year’s levels.

The main reason crude inventories rose so much last week was because of surging imports, not increased domestic production.