Crude Futures Up As Iran Deadlines Loom
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NEW YORK — Crude oil futures rose Monday after Iran turned away U.N. inspectors from a nuclear site and further indicated it plans to defy a looming U.N. deadline to suspend uranium enrichment.
Iran, which earlier this month threatened to use oil exports as a weapon if U.N.sanctions are applied, has said it will reply Tuesday to a package of incentives given to it to cut its nuclear program.
The front-month September light, sweet crude contract on the New York Mercantile Exchange rose $1.31 to $72.45 a barrel. October Brent crude on the ICE futures exchange rose $1.08 to $73.38 a barrel.
September gasoline fell 3.03 cents to $1.9366 a gallon and September heating oil rose 4.32 cents to $2.0327 a gallon.
“Most of the talk is now centering on what the U.N. will do with Iran” said Aaron Kildow, a broker at Prudential Financial in New York. “Some of the price rise was funds going long for Tuesday, I don’t think there’s much doubt Iran will continue to defy the U.N”
The U.N. Security Council has passed a resolution Iran halt the enrichment by August 31 or face economic and diplomatic sanctions.
Iran’s supreme leader Ayatollah Ali Khamenei said his country will keep pursuing nuclear technology, according to state television. Iran, the second-biggest Persian Gulf oil exporter, has said its uranium enrichment program is for nuclear power, not weapons.
Tehran has said it will offer a “multifaceted response” on Tuesday to an incentives package drawn up by the Security Council’s five permanent members and Germany but said it won’t suspend uranium enrichment altogether.
On Monday, diplomats and U.N. officials said Iran has turned away U.N. inspectors wanting to examine its underground nuclear site.
Before a two-session rally that began Friday, crude had slumped 9% from its second-highest-ever close of $76.98 a barrel on August 17 to an eight-week closing low of $70.06 a barrel. The drivers of the decline were a cease-fire between Hezbollah and Israel and a BP PLC (BP) announcement that it will be able to keep up to half its Prudhoe Bay, Alaska, oil capacity on line while it investigates and repairs corrosion at the giant field.
