London: World oil prices firmed on 25 May 2007 as traders looked once again to tight US motor fuel reserves ahead of the peak-demand US driving season which starts this weekend, analysts said.
Further price support came from fresh tensions over the contested nuclear programme of oil producer Iran, they added.
Brent North Sea crude for July delivery rose 31 cents to $71.03 a barrel in electronic trading.
New York’s main oil futures contract, light sweet crude for delivery in July, gained 57 cents to $64.75 a barrel in electronic deals before the official open of the US market.
Crude futures had closed mixed on 24 May, but London’s Brent crude had struck an intra-day high of $71.80 dollars — last seen on 28 August, 2006.
This week the oil market has benefited from renewed tensions with key producer Iran and lingering worries that gasoline or petrol supplies in the United States will not be able to match demand in the coming months.
Traders are also concerned that American refiners cannot convert enough crude oil into gasoline to meet demand.
“There are still concerns over gasoline supplies. Refineries are still having issues,” said CFC Seymour analyst Steve Rowles in Hong Kong.
The US Department of Energy (DoE) had said Wednesday that gasoline stocks rose 1.5 million barrels in the week to 18 May — but remained “well below the lower end of the average range” for the time of year.
The market has been preoccupied with US gasoline supplies ahead of the peak demand driving season starting this Memorial Day weekend, when Americans take to the roads for their summer holidays.
“The numbers are fine but looking deeper into the reality, there is still some uncertainty ahead,” added Rowles.
British, French and US envoys to the UN nuclear watchdog, the International Atomic Energy Agency, are to meet its chief Mohamed ElBaradei on Friday to protest about remarks he made saying that Iran should be allowed to keep some uranium enrichment, diplomats told AFP.
“They will be going to see ElBaradei. They want to tell him they do not agree with what he has said publicly,” said one diplomat, who spoke on condition of anonymity.
Western nations are concerned that Iran’s nuclear programme is a front for an atomic weapons drive. Iran denies this, but analysts worry the ongoing nuclear dispute could at some point lead the Islamic republic to withhold oil sales.
Adding to global gepolitical jitters was the newsflow from fellow crude producer Nigeria.
Gunmen have kidnapped several oil workers in southern Nigeria, a police officer said on 25 May.
“We got news some people were taken hostage but we don’t know what nationality they are yet,” Bayelsa State police commissionner Julian Okpaleke said.
The kidnapping is the latest in a long series of abductions to hit the restive Niger Delta since militants stepped up their attacks on oil firms and related sectors.
Meanwhile, analysts said that London’s six-dollar price advantage over New York was unusual, since the Brent crude contract typically trails the New York contract by one dollar.
However, traders pointed to an abundance of crude oil in the US, particularly in the Cushing terminal in Oklahoma where “light sweet crude” is delivered, the reference for the New York market.