According to FXStreet.com :
Mon, Feb 26 2007, 15:14 GMT
LONDON, Feb 26 (Reuters) – Oil resumed its climb away from $61 on Monday as world powers prepared to discuss tightening U.N. sanctions on Iran, the world’s fourth biggest oil exporter.
Commodities rallied across the board with gold at a nine-month high, nickel at a new record and copper also firm.
U.S. crude <CLc1> was up 52 cents at $61.66 a barrel by 1510 GMT. The market has recorded a higher closing level for the past three sessions and hit a 2007 high of $61.80 on Friday.
London Brent was up 61 cents at $61.49.
Some analysts see a growing upward momentum for oil and note the latest data from the New York Mercantile Exchange points to an increase in investment by large funds.
“It is the first time this year that the large speculative funds are showing a net long position in crude oil,” said Olivier Jakob, an analyst at Swiss-based Petromatrix.
Oil prices have swung between a high of $78.40 last July, when fighting flared in Lebanon, and a 20-month low of $49.90 in January when an expected influx of fund money failed to materialise, disappointing oil investors.
A steady recovery in prices since late January has been supported by gradually tightening supplies — OPEC has twice cut output since November — and by concerns over a possible disruption of Iran’s oil supplies.
IRAN
Officials from the U.N. Security Council plus Germany will meet in London later on Monday to consider possible further steps after the latest U.N. deadline for Tehran to halt its nuclear programme came and went unheeded.
“Iran is a key factor for oil prices recovering from just below $50. However, it is a psychological factor and many market players are sceptical at the same time,” said Tetsu Emori, the chief strategist at Mitsui Bussan Futures.
At the weekend, President Mahmoud Ahmadinejad said Iran’s nuclear programme has “no brake and no reverse gear” and a deputy foreign minister said Iran was prepared even for war.
U.S. Secretary of State Condoleeza Rice said it needed a “stop button.” Vice President Dick Cheney said all options were on the table following Iran’s refusal to heed the U.N. deadline.
Last Thursday’s unexpected drop in weekly U.S. gasoline stocks has also helped push prices higher.
The focus of oil traders and refiners has shifted from heating oil to gasoline as the market readies for peak summer motor fuel demand in top consumer the United States.
“The shift towards summer grade gasoline is the catalyst we believe will continue to underpin refining margins and, if followed by the funds as has been the trend, may provide the impetus for a seasonal push higher by oil,” Citigroup analysts said in a report.
OPEC, which pumps more than a third of the world’s oil, also has its sights on the second quarter when demand for its crude typically slows from a winter peak.
The group’s new Secretary-General told Reuters its existing supply cuts should balance the market if compliance were improved.
“If we are able to improve the percentage of the cut this will do the trick,” said Abdullah al-Badri. (Additional reporting by Ikuko Kao in Tokyo)
- Uh Oh…another round of roller coaster ride for all man kind! Get ready for your seat belt! If Iraq and Iran combined to have oil disruption…with Nigeria Unrest…and OPEC cuts….maybe this will be an interesting Peak Summer indeed! Higher temperature with peak driving season approaching might just see a warmer pricing in oil prices soon…unless Iran settle for a better negotiation with the UN…or spark an spike in oil prices with military conflict!! Roll the dice!!
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