World oil prices Monday bounced back, rising over two percent on worries about possible United Nations sanctions against Iran.
West Texas Intermediate closed in New York at just under $74 a barrel. That's barely $1 under the all- time high of $75.35 set in late April.
Oil analyst Kyle Cooper in Houston tells Bloomberg News that high prices are being sustained by concern about the standoff between Iran and the United Nations concerning Iran's nuclear program. He says market participants see the United States and Britain as pushing the world body to impose economic sanctions against Iran.
"That really has the market on edge that if indeed the UN can get sanctions passed, that Iran will retaliate in some way, that most likely being a cutoff of oil exports," said Kyle Cooper.
Iran, after Saudi Arabia, is currently the OPEC cartel's largest oil exporter. The United Nations next considers the Iran issue on May 9.
Here in Washington an oil industry conference heard Saudi Arabian oil minister Ali Al-Naimi dismiss assertions that the world is running out of oil.
"I believe such views are very short-sighted," said Ali Al-Naimi. "They fail to recognize the extent to which technology has enabled us to find and produce oil."
At the same conference, former US energy secretary James Schlesinger said this is the first time that record energy prices have been caused by user demand. Previous price spikes in 1972 and 1979 were triggered by supply disruptions.
The current trebling of oil prices since 2002 is generally thought to have been caused by increased demand, particularly from fast-growing China and India. The conference heard presentations from Saudi and US oil industry executives, who generally suggested that prices are likely to remain at very high levels for at least the next few months.