OIL prices edged up slightly yesterday after diving more than two dollars a barrel the previous day on signs that the US and other countries could soon release some emergency reserves to keep prices from rising.
Benchmark oil for May delivery rose 24 cents to finish at US$103.02 per barrel on the New York Mercantile Exchange. That's about 4 percent lower than the beginning of this month, when it was close to US$109 a barrel.
The US benchmark has risen about 38 percent from about US$75 per barrel in October and is up 4 percent since the start of the year.
In London, Brent crude for May delivery rose 49 cents to settle at at US$122.88 per barrel on the ICE Futures exchange.
Oil has jumped because of concerns that global supplies could become tighter due to tensions over Iran's nuclear program. The US and other countries are concerned that Iran, the world's third-largest oil exporter, is building a nuclear weapon. Iran has denied it, but won't let international inspectors take a closer look at its nuclear facilities.
The Associated Press reported yesterday that President Barack Obama is moving ahead with tough sanctions aimed at squeezing Iran's oil exports, after he determined that there is enough crude on world markets to take that step without harming US allies.
US sanctions on foreign banks that continue to purchase oil from Iran take effect in June. The aim is to cut off Iran's central bank, which processes almost all of the country's oil business. Other countries are attempting to cut off Iran's oil revenue through a variety of sanctions and an embargo.
The US, France and other nations are also considering a release of some emergency oil supplies to cool rising oil prices. Most analysts agree that releasing oil from the US Strategic Petroleum Reserve would be at best a temporary cap on oil prices.
"A strategic stock release of some sort seems highly likely over the next few months," Barclays Capital said in a report. "A large part of a potential stock release is already being priced in and has been one of the key deterrents from prices moving higher."
Some analysts expect crude has peaked for the year as slower global economic growth undermines demand for oil.
Capital Economics expects Brent crude to fall to US$95 by the end of the year and US$85 in 2013.
"The global economic recovery is set to disappoint," Capital Economics said in a report. "Europe is facing a deep recession, which would only be made worse if oil prices stay elevated for much longer."
In other energy trading in New York, heating oil was virtually unchanged at US$3.17 per gallon, gasoline futures fell 3 cents to finish at US$3.31 per gallon and natural gas fell 2 cents to end at US$2.13 per 1,000 cubic feet, as it lingered at a 10-year low.
Source:shanghaidaily