Friday, June 2 2006 17:24 Hrs (IST) - World Time -

London: World oil prices rose today (June 2,2006)as the market focus remained with major crude producer Iran.

Dealers were also absorbing an announcement from the Organisation of Petroleum Exporting Countries (OPEC) that it would maintain oil output at 28 million barrels per day.

New York's main contract, light sweet crude for delivery in July, added 46 cents to US$ 70.80 per barrel in electronic deals before the official opening of the US market.

In London, Brent North Sea crude for July delivery advanced 39 cents to US$ 69.78 per barrel in electronic trading.

Crude futures has shed around one dollar yesterday after data from the US Department of Energy showed a rise in US energy reserves.

Six world powers agreed yesterday on a incentive package of benefits if Iran suspended its nuclear fuel work, which has raised fears of weapons development, but threatened penalties if Tehran refuses to comply.

Market expectations are that Iran will reject the package, paving the way for possible UN sanctions over its disputed nuclear energy ambitions.

"I don't think Iran will accept the incentive package; they are not driven by economic concerns," said Daruis Kowalczyk a Hong Kong-based investment strategist with CFC Seymour.

Analysts fear that Iran the world's fourth largest producer of crude and the second-biggest member of OPEC might cut oil exports in retaliation.