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World oil prices rise as focus returns to Iran

New York’s main contract, light sweet crude for delivery in September, rose 69 cents to 70.75 dollars per barrel in electronic deals before the official opening of the US market.

In London, Brent North Sea crude for October delivery advanced 65 cents to 72.23 dollars per barrel in electronic trade.

Iran, the world’s fourth biggest crude oil producer, has until August 31 to halt its uranium enrichment programme or face the threat of UN sanctions.

“Crude futures were higher (on Friday), recovering slightly after falling for last few days amid renewed concerns over Iran,” said Michael Davies, an analyst at the Sucden brokerage in London.

The United States will move quickly for UN Security Council action on sanctions against Iran if Tehran refuses to halt uranium enrichment by month’s end, Undersecretary of State Nicholas Burns said Thursday.

Burns said that Iranian President Mahmoud Ahmadinejad’s rejection this week of a UN resolution demanding that Iran suspend all uranium enrichment activity by August 31 was “not surprising.”

Oil market watchers are concerned that sanctions against Iran may lead to severe disruption to global supplies of energy.

Tehran has said it will reply by August 22 to a package of incentives offered by the five permanent members of the UN Security Council plus Germany to halt its uranium enrichment program.

Friday’s oil price gains followed four successive days of losses, which saw New York crude touch as low as 70.00 dollars, which was last seen on June 21.

Prices had begun falling on Monday after a ceasefire started between Israel and Hezbollah, ending one month of violence and easing fears of a wider conflict in the Middle East.

Losses accelerated after a series of US economic data confirmed a slowdown in the American economy, which dampened prospects for crude demand because the United States is the biggest consumer of energy in the world.

And the Organization of the Petroleum Exporting Countries (OPEC) on Wednesday cut its forecast for world oil demand by 80,000 barrels per day. The 11-nation cartel said demand would average 84.5 million bpd in 2006.

Added to the picture, the market was calmed by news that BP would continue pumping half of output at the Prudhoe Bay oil field in Alaska, which normally makes up 8.0 percent of total US production.