Oil prices back above $60 again
February 9, 2007
Oil prices have rebounded above $60 after a fire at a US oilfield and amid the continuing cold snap there.
The cost of a barrel of light, sweet crude rose 50 cents to $60.21 in Asian trading on Friday while Brent crude inched up 5 cents at $59.09.
Prices have flirted with the $60 mark in recent days after falling below $50 last month as demand for oil eased.
But supply concerns rose after a fire shut an oilfield in California which produces 120,000 barrels a day.
The incident led to independent producer Occidental Petroleum shutting down 95% of production at the site in Elk Hills.
Risks
Fresh violence in Nigeria also contributed to the recent rise in prices.
The kidnapping of a French national in the oil-rich Niger delta was the 40th such incident in the past month.
Other factors driving the market were the cold snap in the US, expected to last for another week, which has increased demand for heating oil.
Comments by Iran's supreme leader Ayatollah Khamenei that the country would be prepared to attack US interests if it was attacked also worried traders.
"With the projected fall in Opec supplies in the short term, the market has been gaining momentum," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures.
But Mr Emori said he believed the market had over-reacted to the latest climatic and political developments.
"We have to remember that the geopolitical risks, especially in relation to Iran, have not really been realized in terms of affecting supply and that the winter season will be over in a month."
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