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Oil Rises Towards $70; Iran in Focus | ASHARQ AL-AWSAT English Archive 2005 -2017
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LONDON (Reuters) – Oil climbed towards $70 on Wednesday as U.S. warships put on a show of force off Iran’s coast, coinciding with a United Nations agency report on the Islamic republic’s nuclear programme.

Investors were also looking ahead to a weekly snapshot of gasoline and crude oil stocks in top consumer the United States, due for release at 1430 GMT.

London Brent crude, seen as a better indicator of the global market than U.S. oil, was up 34 cents at $69.86 by 0952 GMT recovering part of the previous day’s 97 cents fall.

U.S. crude was up 31 cents at $65.82.

Nine U.S. warships carrying 17,000 personnel entered the Gulf on Wednesday. Navy officials said it was the largest daytime assembly of ships since the 2003 Iraq war.

They added Iran had not been notified of plans to sail the ships, which include two aircraft carriers, through the Strait of Hormuz, a narrow channel in international waters off Iran’s coast and a major artery for global oil shipments.

The International Atomic Energy Agency will publish a report on Iran’s uranium enrichment later on Wednesday.

It is expected to document notable gains in Iran’s nuclear programme amid discord between Western powers and the atomic energy watchdog chief over what to do to rein in the world’s fourth-biggest crude oil exporter.

“The U.S. Navy is sending two aircraft carriers into the Gulf for training maneuvers, on the day of the IAEA Iranian report,” said Olivier Jakob, analyst at Petromatrix.

“We are still of the opinion that this is more a symbolic show of force than anything else.”

U.S. oil stock data is due for release at 1430 GMT.

A Reuters poll of analysts has forecast a 1.4 million barrels rise in gasoline inventories over the week as refiners lifted output ahead of the Memorial Day holiday this weekend, which marks the start of the summer driving season.

“We know Iran hasn’t complied with the conditions so the report is going to be a hawkish one,” Dariusz Kowalczyk, an analyst from Hong Kong-based CFC Seymour Ltd, said.

Oil hit a nine-month high of $70.83 on Monday, lifted by strong U.S. gasoline and attacks on oil facilities in Nigeria, the world’s eight-biggest oil exporter.

Kidnappings and militant attacks have surged since February 2006. About 24 percent of Nigeria’s roughly three million barrels per day production capacity is shut.

Technical analysts at Barclays Capital put initial support for Brent at $69.10 and resistance at $71.