Oil fades from $67 record high

 

Oil faded from its $67 high this afternoon but the United States' refusal to rule out force against Iran, OPEC's second biggest producer, kept prices bubbling under its Friday records.

US light crude was trading at $66.40 a barrel at this afternoon, down 46 cents having surged more than $1 on Friday to touch a record $67.10. London Brent crude at $66.59 after hitting a new record high of $66.85 on today.

Some refining units at US oil facilities have finally returned to service from a spate of shutdowns since late July, which propelled US crude and gasoline futures to historical highs.

On Friday, Chevron reported that the larger of two crude units at its 260,000 barrel-per-day (bpd) refinery in El Segundo, California, was in the process of restarting.

There were also no fresh problems reported over the weekend, taking the market a few days closer to the end of the traditional driving season, marked by Labour Day on September 5th.

Despite the slight respite, US crude oil is still about 50 per cent higher than at the start of the year. Most traders and analysts said oil prices might soon resume their rally toward $70 a barrel because of strong demand and a nagging lack of spare capacity in both producing countries and the refining industry.

Elsewhere, Tehran's resumption of nuclear work has raised the prospect of UN Security Council sanctions, and Iranian President Mahmoud Ahmadinejad has nominated acting Tehran mayor Ali Saeedlou, an oil industry outsider, as oil minister, adding to investors' anxiety over the stability of Iran's oil output.