LONDON -- Oil prices rose back above $67, recovering from losses seen earlier in the week, as Iran's nuclear dispute with the West took a turn for the worse while Nigerian militants threatened further attacks against oil facilities.
At 11.48 GMT, March-dated U.S. light crude futures were up 74 cents at
$67.05, while March-dated Brent contracts were up 69 cents in London at
$65.61 a barrel.
Earlier today, Iran's chief nuclear negotiator Ali Larijani said a Russian
proposal to carry out nuclear fuel work for Iran in order to allay fears
Tehran is seeking the nuclear weapon was 'not sufficient' for Iran.
The comments dampened hopes that Tehran, whose move to resume nuclear fuel
research has led the U.S. and EU powers to call for referral to the
Security Council, was considering a compromise solution.
The International Atomic Energy Agency is holding an emergency meeting on
Iran on Feb 2 -- when such a referral could take place -- leaving just a
small window for a new compromise.
'I think the market is factoring the news (on Iran and Nigeria) into the
price ... it more or less explains the $1 move,' said Societe General's
head of commodities research Frederic Lassere.
Lassere said the standoff with Iran, the world's fourth largest exporter,
represents a potential supply threat while the unrest in Nigeria is a more
immediate concern as it represents an actual supply disruption.
Around 221,000 bpd or 8 pct of national output remains offline in Nigeria
following a month-long campaign of sabotage by militants, who today
threatened a second wave of violence.
The militants, believed to be holding four foreign oil workers hostage,
also denied reports in the press reports they were planning to release the
hostages.
Oil prices hit a 4 month peak of $69.20 on Monday on concerns over
tensions in Iran and Nigeria, but had lost some $3 by Wednesday as U.S. inventory
data showed greater than expected gains in gasoline and distillates.
Prudential analyst Jim Ritterbusch says the potential loss of Iranian oil
'should prove capable of maintaining a $60 handle in crude values well
into next month'.
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