Oil tops $67 amid geopolitical woes

Crude oil futures climbed back above $67 a barrel yesterday on nagging supply fears linked to Iran's nuclear standoff with the international community and militant attacks in Nigeria, Africa's largest oil exporter.

Adding to the bullish tone, Saudi Arabia's oil minister Ali Naimi said prices are unlikely to fall in the near term and OPEC's president suggested the global economy could live with $60 a barrel.

Light sweet crude for March delivery rose $1.50 to $67.76 a barrel on the New York Mercantile Exchange. March Brent crude futures on London's ICE Futures exchange rose $1.32 to settle at $66.24 a barrel.

Heating oil gained 2.89 cents to $1.8069 a gallon, while gasoline futures advanced by 5.21 cents to settle at $1.7364 a gallon.

''Geopolitical tensions remain in Iran and Nigeria," said Victor Shum, energy analyst at Purvin & Gertz in Singapore. ''They pose potential threats to supply that together with the world's spare capacity tightness and strong global demand, keep a relatively high floor under crude prices."

Naimi said prices are not likely to drop in the near term even though supply and demand are balanced.

''I have no control over prices. We accept that they're high, and of course, we want them to come down," Naimi said in New Delhi, where he is visiting as part of a state delegation.

OPEC president Edmund Daukoru, when asked at the World Economic Forum meeting in Davos, Switzerland, whether the global economy could live with crude oil prices at $60 barrel, replied: ''I honestly think it can."

The Organization of Petroleum Exporting Countries will meet in Vienna on Tuesday.

''OPEC is committed to supplying the market at a reasonable price," Daukoru said.

Markets were also concerned about the dispute between Iran -- OPEC's second-largest oil producer -- and the West over the restarting of its nuclear program.

In Nigeria, four foreign oil workers were kidnapped at a Royal Dutch Shell PLC oil platform in the Niger Delta on Jan. 11. Militants who say they are holding the men are demanding the release of two tribal leaders and for Shell to pay local communities $1.5 billion in compensation for oil pollution.

Meanwhile, natural gas futures rose 17.1 cents to $8.40 per 1,000 cubic feet. On Thursday, natural gas fell 23.1 cents to settle at $8.229 -- its lowest level in almost six months, after US government data showed domestic inventories were well above the five-year average for this time of year.