NYMEX crude vaults over a dollar in Access to cross $73/barrel

Singapore (Platts)--4Jun2006

World crude oil futures rocketed up in early electronic trading Monday,
rattled by Iranian supreme leader Ayatollah Ali Khamenei's threat Sunday that
a "single mistake" by the US on Iran would put energy supplies at "serious
risk."
His warning came on top of a market already nervous about gasoline
supplies in the US this summer driving season, amid a spate of recent refinery
snags.
At 155 GMT, the New York Mercantile Exchange's July crude futures
contract was traded at $73.45/barrel on the out-of-hours Access system, up
$1.12/barrel from Friday's close in New York. The contract rallied
$1.99/barrel Friday as the US Energy Information Administration reported a
pick-up in oil demand, even as refiner Valero battled problems at several
refineries and the US dollar swooned on a weak May jobs report.
IPE Brent, which sees hardly any trading during early morning hours in
Asia, was also spiralling upward Monday. The July Brent contract last changed
hands at $72.20/barrel at 156 GMT, up $1.17/barrel from Friday's close. It had
settled at $71.03/barrel Friday, a gain of $1.64/barrel.

IRANIAN LEADER WARNS US
Iran's supreme leader Ayatollah Ali Khamenei declared Sunday that the
Islamic republic must not give up its "scientific goals" in the face of
"threats and bribes," AFP reported.
"We have achieved a lot of scientific goals, and this is a resource that
our late imam had saved for us," Khamenei said in a speech marking the 17th
anniversary of the death of Iran's Islamic revolutionary leader, Ayatollah
Ruhollah Khomeini.
"This is a historic investment. It represents our political independence
and national self confidence. It is due to the bravery of our people and
officials, and we should not sell out this precious resource because of the
enemies' threats and we should not be fooled by enemy bribes," he said.
The five permanent members of the UN Security Council plus Germany last
Thursday agreed to present Tehran with a package of incentives and the
prospect of fresh multilateral talks on the condition that Iran first suspends
uranium enrichment.
"There is no consensus against Iran. It is only the Americans and some of
their allies," Khamenei said, asserting that Iran had won support from members
of the Organisation of Islamic Conference and the Non-Aligned Movement.
"This is all about a political monopoly of energy. They want others to
beg for energy," he added.
Khamenei also fired off a staunch warning against the United States.
"You threaten Iran. You say you want to direct energy in the region. If
you make a single mistake about Iran, the supply of energy will definitely be
put in serious risk," AFP quoted Khamenei as saying.
Iran is OPEC's second largest producer, averaging about 3.9 million b/d
of output.

GASOLINE WORRIES IN US AMID STRONG DEMAND
In the US, despite recent gains in inventories, the gasoline market
remains highly sensitive to any supply disruption, particularly given the pace
of demand growth.
The US Energy Information Administration last week reported that total
product deliveries on a four-week moving average at 20.1 million b/d were
681,000 b/d or 3.4% above year-ago levels.
Exacerbating the situation were unforeseen outages at Valero's Port
Arthur, Corpus Christi and Delaware City refineries.
Valero last Thursday said it had reduced production rates by 30% at its
152,000 b/d Corpus Christi refinery in Texas following a fire at the dock.
Gasoline production was reduced by 50,000 b/d and distillate production
by 20,000 b/d. This plant, though, was scheduled to ramp up to full rates over
the weekend.
Valero's 250,000 b/d Port Arthur refinery cut gasoline production by
50,000 b/d and repairs and catalyst reloading at a reformer were expected to
take about 10 days from their May 27 start.
The refiner's 175,000 b/d Delaware City refinery was hit by lightning
Friday morning. Although the company said it did not expect "a material impact
on production," the confluence of troubles nevertheless added to market
jitters.


 

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.