Oil prices rose to $74 a barrel Tuesday amid fear that international pressure on Iran to modify its nuclear program may lead to supply cuts from the key exporter.
An Iran official earlier in the day reiterated its intention to keep enriching uranium, while U.S. Undersecretary of State Nicholas Burns said he believed European governments will agree to sanctions against Iran.
Analysts expect energy futures to remain high, as traders keep one eye on issues abroad Iran's nuclear program, rebels in Nigeria cutting off oil supplies, and the possibility of terrorist attacks on oil facilities and another eye on problems on the home front, notably tight U.S. gasoline supplies going into the summer driving season.
"The trend is still up," said BNP Paribas commodity futures analyst Tom Bentz. "Unless something changes, I don't see anything out there that's going to cause any big drops."
Light, sweet crude futures for June delivery rose 30 cents to $74 a barrel in afternoon trading on the New York Mercantile Exchange moving closer to the intraday peak of $75.35 reached briefly on April 21.
Pump prices crawled higher as well, nearing the record highs seen in early September after Hurricane Katrina struck the Gulf coast and the region's oil facilities. On Tuesday, the average cost of a gallon of regular, unleaded gasoline was $2.92, up 35 cents from a month ago, according to AAA's daily fuel gauge report. U.S. drivers are now paying about 14 percent more to fill their tanks than a year ago.
The United States, Britain and France plan to introduce a new Security Council resolution this week that would make Iran's compliance with their demands mandatory, and enforceable through sanctions or military action, reports AP.
The United States has imposed new sanctions against the Nord Stream 2 gas pipeline project, which still remains under construction