Oil prices reverse 3 day decline-rise by more than one dollar

12-Jun-06

Light sweet crude for delivery next month climbed US$1.28 to US$71.63 a barrel on the New York Mercantile Exchange. In London, Brent crude gained US$1.43 to settle at US$70.48 on the ICE Futures exchange Reversing a 3 day decline, oil prices rose by more than one dollar a barrel on Friday, triggered by tough talk from an Iranian cleric against a Western incentive package aimed at persuading Iran to suspend uranium enrichment, and the kidnapping of a senior Iraqi petroleum industry official has proved that the killing of al-Qaeda's leader in Iraq has not marked the end of instability in Iraq. Adding to the market woes was a declaration by a Nigerian government official that more than 800,000 bpd of the country's oil production was shut due to violence in the Niger Delta. This is almost 60% more than previously reported. A total power failure at Valero Energy Corp's 240,000 bpd Aruba refinery on Wednesday night, has caused a shutdown t the refinery and it will be at least two weeks before the plant would be operating at "reduced rates." The situation has been aggravated by a strong global demand and the oncoming Atlantic hurricane season.