This doesn't look that good.
Crude Oil Gains for First Day in Five on Demand Outlook in U.S.
Aug. 18 (Bloomberg) -- Crude oil rose for the first time in five sessions on speculation that the U.S. economy is still strong enough to keep demand from falling.
U.S. oil inventories have declined in the past three U.S. Energy Department weekly supply reports and are down 4.6 percent since mid-June. Oil dropped below $70 a barrel today for the first time since June as reports indicated a moderating U.S. economy.
``We've ridden down this market as far as it will go,'' said William Adams, chief energy and capital market strategist at LaSalle Futures Group Inc. in Chicago. ``The demand picture hasn't changed.''
Crude oil for September delivery closed up $1.08, or 1.5 percent, to $71.14 a barrel on the New York Mercantile Exchange. Prices fell to $69.60 during the session, the lowest since June 21. Oil, which dropped 4.3 percent this week, is still up 17 percent this year.
Oil also rose because of concern that supplies might be disrupted if Iran faces United Nations sanctions over its nuclear fuel program.
The U.S. will press the UN Security Council to impose economic sanctions if Iran doesn't meet an Aug. 31 deadline for stopping uranium enrichment, U.S. Undersecretary of State Nicholas Burns said yesterday. Iran has said it will answer the Security Council resolution by Aug. 22.
Nuclear Power
Iran has the ``right'' to nuclear energy for power generation, President Mahmoud Ahmadinejad said yesterday, according to INRA, the state-run Iranian News Agency.
The U.S. and the U.K. suspect Iran is using its atomic program as a cover for the development of weapons.
``In the event that Iran does not give an answer to the Security Council and does not comply with the conditions, I think we will want to move very quickly in the first part of September toward a debate about sanctions,'' Burns said yesterday. ``We've given Iran every opportunity to comply. It's not a mystery what has to happen.''
Adams said he doubted that Iran would cut off its oil supply to the rest of the world. Still, sanctions would create problems for the market.
``No one's going to benefit from this,'' he said. ``Sanctions are definitely going to cause some challenges to supply.''
Brent crude oil for October settlement rose 72 cents, or 1 percent, to $72.30 a barrel on London's ICE Futures exchange. Prices are up 16 percent from a year ago.
To contact the reporter on this story: Matthew Leising in New York at
mleising@bloomberg.net .
Last Updated: August 18, 2006 15:32 EDT