Crude oil rises on supply worries
Crude oil prices were up again on Monday as Iran continued to insist that it will pursue its nuclear program and as worries persisted over supply issues in Nigeria in the wake of militant attacks on facilities there.
Brent crude for June delivery was up 16 cents to $70.85 per barrel after trading as high as $71.40 per barrel earlier in the day, a new record, during the day. May West Texas Intermediate crude on the New York Mercantile Exchange added 33 cents to $69.95 per barrel after going up to $70 per barrel during the session. June delivery WTI was even higher, trading at $71.25 per barrel. The US prices were the highest they have been since August 30 of last year in the wake of Hurricane Katrina.
An announcement by former Iranian president Rafsanjani, during a visit to Kuwait, that his nation intends to continue enriching uranium caused new concerns in the US and other western nations that Iran is determined to build a nuclear weapon. The comments are causing more concern after reports that the US is thinking about using tactical nuclear weapons to stop Iran’s nuclear work. Any conflict with Iran would cause disruption of the oil supply from the world’s fourth largest exporter.
Analysts are also concerned about the slowdown in output from Nigeria after recent attacks on facilities by militants. Production there is down by 500,000 barrels per day, and among affected companies Royal Dutch Shell said on Monday that it has still not assessed its offshore facilities in an effort to resume production. Also worrying are comments from OPEC that it is already producing at capacity and can do nothing more to make up for lost production in Nigeria, although the oil cartel insists that there is presently no supply shortage.