US Light oil price trading near $72 on new Iran tensions

US Light oil prices rose near to $72 a barrel in early trading on Monday in Asia, boosted by new tensions over Iran’s nuclear program. Helping world oil prices rebound Monday were expectations of a spurt in demand for crude oil products like heating oil because of a cold spell in the US and tensions in the Middle East.

Iranian President Mahmoud Ahmadinejad on Sunday ordered the Atomic Energy Organization of Iran (AEOI) to be on standby to start enriching uranium to a purity of 20 percent, infuriating Western countries who want Iran to halt nuclear activities.

Head of the AEOI Ali Akbar Salehi said on Sunday the country was to begin enrichment on Tuesday and would inform the International Atomic Energy Agency (IAEA) of its plan a day before.

Iran, currently enriching uranium to a purity of about 3.5 percent, said it wanted higher-grade uranium to power a research reactor producing medical isotopes. Such a move prompted the Western nations to step up pressure on the Islamic republic, signaling new sanctions.

US Defense Secretary Robert Gates, who was visiting Italy said Iran’s response was “very disappointing.” He called on the international community to pressure Iran into abandoning its unclear program.

“This is winter’s last hurrah, while Iran’s announcement also gives an excuse for investors to buy,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.

Tags:  Iran, light oil prices, nuclear, oil, program, tensions, trading, US