Oil Prices Extend Gains Above $70 a Barrel

SINGAPORE – Crude oil prices rose in Asian trading Monday amid mounting international tensions over the nuclear ambitions of Iran, the world’s fourth-largest oil exporter.

Crude futures lost more than $4 a barrel last week after U.S. government data showed an increase in gasoline supplies. But geopolitical concerns still underpin oil prices, including unrest in Nigeria, violence in Iraq and rising resource nationalism in South America.

But the most pressing source of anxiety stems from the possibility that Iran, OPEC’s No. 2 oil producer, could cut supplies because of international pressure to modify its nuclear program.

Light, sweet crude for June delivery gained 27 cents to $70.46 a barrel in electronic trading on the New York Mercantile Exchange. The contract on Friday rose 25 cents to settle at $70.19 a barrel.

Gasoline futures advanced 0.43 cent to $2.0449 a gallon while heating oil prices rose 0.86 cent to $1.9647 a gallon. Natural gas prices fell 3.5 cents to $6.740 per 1,000 cubic feet.

Iran on Sunday renewed its threat to withdraw from the Nuclear Nonproliferation Treaty, with its president saying sanctions would be "meaningless" and its parliament seeking to an end to unannounced inspections of its nuclear facilities.

President Mahmoud Ahmadinejad said he would not hesitate to reconsider NPT membership, speaking as Washington and its allies pressed for a U.N. Security Council vote to suspend Tehran’s uranium enrichment program.

The United States is backing attempts by Britain and France to win Security Council approval for a U.N. resolution that would threaten possible further measures if Iran does not suspend uranium enrichment – a process that can produce fuel for nuclear reactors to generate electricity or, if sufficiently processed, to make atomic weapons.

The U.S. ambassador to the United Nations, John Bolton, said Sunday he believed the resolution would move to a vote this week, with or without support from Moscow and Beijing.

Some 500,000 barrels per day of Nigerian production, most of it operated by Royal Dutch Shell PLC, remains off-line because of violence there, and more than 300,000 barrels per day is still shut down in the Gulf of Mexico since Hurricane Katrina battered offshore platforms in August.

Strong global demand and a limited supply cushion magnify the significance of these events, while a surge of investors betting on oil and other commodities has also lifted prices – which have fallen more than $5 from their intraday peak of $75.35 reached April 21 on the Nymex but remain roughly 40 percent higher than a year ago.