Ukrainian Prime Minister Yuri Yekhanurov speaks during a news conference in Kiev, January 4. Ukraine welcomed a gas pricing deal with Russia signalling the start of a new phase for the country's economy that would stick to market rules rather than barter deals. - REUTERS
AP, WASHINGTON:
OIL PRICES rose Wednesday in a continuation of bullish market sentiment that drove crude futures US$2 higher the day before, although natural gas futures declined amid mild temperatures in the U.S.
Light sweet crude for February delivery rose 28 cents to settle at $63.42 a barrel on the New York Mercantile Exchange, where refined products prices also climbed.
Analysts partly attributed the big jump in oil prices on Tuesday, and again on Wednesday, to a Russian-Ukrainian natural gas dispute in which Russia cut pipeline runs, raising fears about the stability of global supplies.
They also said some investors looking for better returns than U.S. stock markets have delivered in the past year are piling into energy futures, creating unusually high demand for crude oil, gasoline and heating oil contracts.
Oil futures finished 40 percent higher than they started in 2005, reaching a peak of $70.85 per barrel on Aug. 30 after Hurricane Katrina damaged Gulf of Mexico production platforms.
CONCERNS
The start-of-the-year rally has also been fuelled by concerns created by a declaration from a top official in Tehran that Iran, a top oil producer, will resume research into nuclear fuel production -- a comment that raised concerns about the country's nuclear weapons ambitions.
In Vienna, PVM Oil Associates suggested prices would likely rise temporarily because of plans by the Organization of Petroleum Exporting Countries to cut output.
But further ahead, increased non- OPEC production coupled with decreasing demand, "could result in oil stocks rising to unprecedented levels in history and to downward pressure on oil prices," said PVM.
