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Oil Prices Settle at $67 Per Barrel

Posted on: Tuesday, 24 January 2006, 18:00 CST

WASHINGTON - Oil prices fell by more than $1 a barrel Tuesday despite lingering concerns about oil supplies in view of Iran's nuclear ambitions and militant attacks in Nigeria.

Light sweet crude for March delivery fell $1.04 to settle at $67.06 a barrel on the New York Mercantile Exchange.

Heating oil futures fell 2.38 cents to $1.8171 a gallon, while gasoline slipped 4.88 cents to $1.7444 a gallon.

March Brent crude slipped 10 cents to $66.06 a barrel on London's ICE Futures exchange.

"This market has run up too far too fast," said BNP Paribas Commodity Futures broker Tom Bentz, adding that gasoline and heating oil supplies in the U.S. were adequate. "It's a needed correction."

But other analysts said the market would remain on edge because of potential disruptions to supply from Iran, the second-largest oil producer within the Organization of Petroleum Exporting Countries, and because of growing unrest in Nigeria.

Officials of the Italian oil company Eni SPA said an armed assault on its offices left nine people dead Tuesday in Nigeria's petroleum-rich south, where four foreign oil workers also are being held hostage.

A rash of attacks and kidnappings in recent weeks have cut Nigeria's daily exports of 2.5 million by nearly 10 percent and claimed at least 20 lives. Agip said there was no evidence the latest violence, in which the attackers stole cash, was linked to those incidents.

Iran warned Monday that if it was referred to the U.N. Security Council, which has the power to impose sanctions, it would immediately forge ahead with developing a full-scale uranium enrichment program.

The message, delivered by Ali Asghar Soltaniyeh, Iran's senior envoy to the International Atomic Energy Agency, reflected Tehran's defiance in the face of growing international pressure over its nuclear program. Enrichment can be used in electricity production but it is also a pathway to making nuclear weapons.

The IAEA's 35-nation board meets Feb. 2 to decide on referral.

Crude oil prices reached a record settlement of $70.85 a barrel on Aug. 30.

Natural gas futures rose 32.6 cents to $8.9 per 1,000 cubic feet on Tuesday.

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Associated Press Writers George Jahn in Vienna, Austria and Dulue Mbachu in Lagos, Nigeria contributed to this report.

Source: Associated Press/AP Online

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