Light, sweet crude for June delivery inched up to US$69.91 a barrel in electronic trading on the New York Mercantile Exchange, as expectations of a rise in U.S. gasoline stocks last week were moderated by relentless concerns over Iran's nuclear ambitions. If U.S. gasoline stocks rise for a second straight week, it could help ease concerns over a possible shortage during the peak summer driving season.
The past few weeks has seen a surge in oil prices due to fears that Iran (OPEC's No. 2 producer) could cut supplies in response to international pressure to modify its nuclear program. A letter from Iran's leader to President Bush on Monday has proposed "new solutions" to mounting tensions. This has marginally eased market worries and prices are estimated to retreat to US$63-65 a barrel if Iran and the West are able to reach a peaceful compromise.
Other factors affecting oil prices are unrest in Nigeria, violence in Iraq and rising resource nationalism in South America. 500,000 bpd of Nigerian production remains off-line because of violence there, and more than 300,000 bpd production is still shut down in the Gulf of Mexico since Hurricane Katrina battered offshore platforms in August.
09-May-06 
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