Oil price rebounds as US renews push to curb Iran
September 22, 2006
By Mark Shenk and Robert Tuttle
New York - Crude oil rebounded from a six-month low on speculation that the US would renew a push for UN sanctions on Iran if negotiations to curb the country's nuclear programme did not begin in two weeks.
The US secretary of state, Condoleezza Rice, and foreign ministers of Britain, China, France, Germany, Italy and Russia set the deadline at a meeting in New York, a European diplomat said.
Oil fell below $60 (R440) a barrel yesterday for the first time since March after President George W Bush supported diplomatic efforts to end the dispute and as fuel supplies rose.
The situation with Iran "is definitely not resolved", said Amanda Kurzendoerfer, commodity analyst for Summit Energy Services. "The market views it as a stalemate."
Crude oil for November delivery rose 0.3 percent, to $60.94 a barrel at 10.01am on the New York Mercantile Exchange. Prices are down 8.8 percent from a year ago.
The October contract touched $59.80, the lowest for a contract closest to expiration since March 21.
"We have fallen more than 20 percent in the past month," Kurzendoerfer said. "Just to see this little bounce is not uncommon."
Prices have fallen 22 percent from a record $78.40 a barrel on July 14 as tensions in the Middle East eased and US fuel inventories increased.
"You can't go straight down," said Bill O'Grady, an analyst with AG Edwards & Sons. "Every attempt at a rally can't seem to hold water. [Petrol] inventories are comfortable and distillate inventories are downright squirrelly."
The Britain foreign ministry told Russia it was concerned about the threat to cancel Royal Dutch Shell's permit for the $20 billion Sakhalin-2 oil and gas project.
Russia's natural resources ministry said that it expected to receive authorisation by yesterday from the country's industrial safety service for the ministry's order to cancel a key operating permit on environmental damage grounds.
Brent crude oil for November settlement rose 12c to $60.59 a barrel on the ICE Futures Exchange. - Bloomberg
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