Updated from 10:15 a.m. EST
Oil prices climbed Monday as the standoff with Iran overshadowed indications that OPEC members plan to maintain their currently high production quotas.
Crude for March delivery jumped 59 cents to close at $68.35 a barrel after Iran's meeting with the European Union failed to resolve a dispute over nuclear research. Traders have bid up oil prices 12% since the start of the year over concerns that potential sanctions against Iran and supply disruptions in Nigeria will cut world oil stocks.
In an attempt to head off sanctions, Iran met with European Union officials Monday to discuss its nuclear program, but didn't offer any concessions.
"The negotiating process has reached an impasse," French Foreign Minister Philippe Douste-Blazy told
after meeting with Iran and E.U. represenatives in Brussels Monday. "The intervention of the Security Council is now necessary."
Iran took steps to restart nuclear research earlier this month. The country claims the program is aimed at power production; the West suspects a more sinister motive. Threats of economic sanctions have roiled the energy markets because there is not enough crude capacity to replace Iran's 2.4 million in daily oil exports.
"Iran's nuclear ambitions and the fanatical statements by its president have brought the buyers back to oil," said Phil Flynn, an energy analyst at Alaron Trading in Chicago
The International Atomic Energy Agency will meet on Thursday to discuss Iran's intentions and whether the matter should be referred to the U.N. Security Council for possible sanctions. The U.S., France, Germany and Great Britain have advocated for the U.N. Security Council to take up the matter.
Supply disruptions in Nigeria, where militant attacks have reduced the country's oil production by 10%, added to oil's spike. Rebels robbed a second oil company office on Sunday, stealing $250,000 in cash from South Korea's Daewoo oil company. Although four expatriate oil workers, held since Jan. 11, were freed, militants issued renewed threats to continue their attacks on the country's oil pipelines and rigs.
The events drowned out bearish developments elsewhere. Ali Naimi, Saudi Arabia's oil minister, said OPEC's members decided at a meeting on Monday to keep output at 28 million barrels per day.
"Yes, we all agreed," Ali al-Naimi, Saudi Arabia's oil minister, told the
in Vienna Monday. "We are in agreement mode."
But Naimi and Rafael Ramirez, the Venezuelan oil minister, cautioned the group would likely cut production at its March meeting.
The Organization of the Petroleum Exporting Countries, which pumps 40% of the world's crude, meets Tuesday in Vienna and will formally decide whether output should be maintained at record levels or trimmed to prop up oil prices. OPEC raised its output to a 25-year high this fall after a pair of hurricanes hit the Gulf of Mexico and shut down much of the area's petroleum production.
The rise in oil prices and cold weather predictions drove up the rest of the energy market Monday, with natural gas adding 88 cents, or 10%, to $9.39 per million British thermal units. Natural gas was last this high on Jan 6, when it hit $9.63. Colder-than-average temperatures should return to the Northeast, the country's largest consumer of heating fuel, the first week of February, the National Weather Service said.
Unleaded gasoline tacked on 3 cents to $1.77 a gallon and heating oil rose 2 cents to $1.83 a gallon.
In corporate news,
fourth-quarter earnings rose 27% from a year ago to $10.7 billion, or $1.71 a share. Adjusted earnings of $1.65 a share were 20 cents ahead of forecasts, lifting the shares 3%, or $1.82, to $63.11.