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VOL. 36 | NO. 10 | Friday, March 9, 2012




Oil flat after US denies reports on reserves

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NEW YORK (AP) — Oil prices were barely changed Thursday after the White House said reports that the U.S. and Britain had agreed to release oil from government-controlled emergency reserves were inaccurate.

Oil earlier dropped more than $1 per barrel on the reports.

The reports overshadowed an important development in the dispute between the West and Iran over that country's nuclear program. The Society for Worldwide Interbank Financial Telecommunication said it would cut ties with Iranian banks, putting its oil sales in limbo. Iran, exports about 2.2 million barrels of oil a day, will continue to sell to countries like China, though it will now need to find creative ways to get paid, experts said.

"They're going to sell because they have to," independent oil analyst and trader Stephen Schork said. "Whether they get paid through SWIFT or with barges filled with gold, they're going to do it."

Benchmark crude rose 2 cents to $105.45 per barrel in New York while Brent crude fell $1.36 to $123.22 per barrel in London.

Oil had fallen toward $104 per barrels Thursday morning as several news organizations reported that President Barack Obama and Prime Minister David Cameron had agreed to release spare supplies of oil in an effort to drive fuel prices lower. Diesel prices have increased 3 percent in the United Kingdom this year while gasoline prices have jumped 17 percent in the U.S. because of an increase in oil prices.

A White House official later said those reports were inaccurate. The official, speaking on condition of anonymity because he was not authorized to speak publicly, said the United States regularly consults with the British on energy issues, and that any discussion between the president and the prime minister occurred in that context.

White House officials have said in the past that any move to tap the Strategic Petroleum Reserve would occur concurrently with other countries tapping their reserves, as the U.S. did last year.

The U.S. released oil from its Strategic Petroleum Reserve in August with only limited success. Oil prices dropped nearly 5 percent when the government announced the release of 30 million barrels from the SPR on July 23. Prices rebounded over the next eight days. Oil ended the year higher than it started.

"It's was only a temporary relief" from rising prices, analyst Andrew Lipow said.

In other energy trading, heating oil fell by 1.91 cents to $3.2427 per gallon while gasoline futures gave up 4.49 cents to $3.302 per gallon. Natural gas futures added 0.04 cent to $2.287 per 1,000 cubic feet.

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UTILITY CONNECTIONS 0 0 0
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