Oil prices tread water

LONDON - World oil prices steadied on Monday as traders eyed developments in crude-producing nations Iran and Iraq.

By (AFP)

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Published: Mon 26 Jun 2006, 6:27 PM

Last updated: Sat 4 Apr 2015, 1:12 PM

New York’s main contract, light sweet crude for delivery in August, slid five cents to 70.82 dollars per barrel in electronic deals before the official opening of the US market.

In London, Brent North Sea crude for August delivery also lost five cents to 69.95 dollars per barrel in electronic trading.

“Oil futures remained almost flat as signs of increased supply from Iraq countered some of the recent (price) strength on the back of strong (US) gasoline demand numbers out last week,” said Sucden analyst Sam Tilley.

Iraq, which sits on one of the world’s larges proven oil reserves, said Sunday its oil production is now more than 2.5 million barrels a day, a record since the fall of Saddam Hussein.

The country’s oil Minister Hussein Shahristani said on US television that Iraq hoped to be producing 4.3 million barrels by 2010 and to be challenging Saudi Arabia as the world’s largest producer by 2015.

But Tilley cautioned that the forecast was “perhaps a little optimistic given the country’s ongoing problems.”

Iraq’s oil production stood at about 2.5 million barrels a day when Saddam was deposed by US-led forces in 2003. It then collapsed to virtually nothing and has been slow to rebuild in part owing to insurgent attacks.

Oil prices were also underscored by lingering tensions over the Iranian nuclear energy crisis.

Iran on Sunday again brandished oil as a weapon in the dispute over its nuclear programme as it continued to resist international demands to freeze sensitive uranium enrichment work.

The threat came amid mounting pressure on Tehran to accept a proposal that it halt enrichment -- at the centre of fears it could acquire nuclear weapons -- in exchange for multilateral talks and a package of incentives.

The West suspects that Iran, which is the OPEC oil cartel’s number two exporter, is secretly trying to build nuclear weapons. Iran denies this and insists its atomic programme is purely for electricity generation.

Crude futures rose last week on the back of strong gasoline or petrol demand data from the United States. According to the US Department of Energy, demand for motor fuel in America was close to a historical daily record.

Traders are paying particular attention to the gasoline numbers because car drivers across the United States are taking to the roads for their summer holidays in what is known as the peak-demand driving season.

Many analysts seized on the demand data as proof that the high price of crude oil had not eroded consumption.

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