Ouch!

Oil Prices Rise As Bush Presses Iran

By GEORGE JAHN
Tuesday, June 20, 2006

VIENNA, Austria - Crude-oil futures rose Tuesday over Iran concerns after President Bush warned that nations worldwide will not back down from their demand that Tehran suspend uranium enrichment.

Concerns over Iran's nuclear ambitions have clouded the outlook for the nation's oil exports _ and global oil prices _ despite expectations that U.S. stock levels will remain healthy.

Light, sweet crude for July delivery rose 72 cents by midday in Europe, trading at $69.70 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract fell 90 cents to settle at $68.98 after OPEC said high prices were affecting demand, and the prospect of rising interest rates fueled market concerns about economic growth.

July Brent crude futures on London's ICE Futures exchange rose 80 cents to $68.91 a barrel.

Traders had taken some relief from conciliatory remarks out of Iran on Saturday that the Western package of incentives meant to persuade the Islamic republic to give up its uranium enrichment program was "a step forward."

But the issue remains tense, with Bush saying if Iran rejects the incentives, it will face action before the U.N. Security Council and progressively stronger political and economic sanctions.

"The calming comments from Tehran have taken out part of the risk premium, but the threat of a potential supply disruption from Iran is still present, although not imminent," said Victor Shum, an energy analyst with Purvin & Gertz.

"In the short term, if we see progress toward a diplomatic resolution in Iran, prices will drop to the low- to mid-$60s," he said.

Gassing up the Beetle yesterday cost me $40. I remember when I bought my first $20 tank of gas last year, which sent me into shock. Where is all that jawboning on gas prices W promised us, hmm?