Friday, August 18 2006 14:57 Hrs (IST) - World Time -

Singapore: Crude prices increased in Asian hours today (Aug 17, 006) as traders switched focus to Iran where the oil-rich Islamic republic has until August 31 to halt its uranium enrichment programme or face the threat of UN sanctions, dealers said.

At 10:45 am (0815 IST), New York's main contract, light sweet crude for September delivery was 43 cents up at 70.49 US dollars a barrel from its close of 70.06 dollars in the United States yesterday, its lowest finish in almost two months.

Brent North Sea crude for September delivery was steady at 73.08 dollars a barrel.

"I think that maybe there is some sense of underpricing due to risk in the market, mainly caused by geopolitical reasons," said Dariusz Kowalczyk, senior investment strategist with CFC Seymour in Hong Kong.

"I think people fear that the response of Iran regarding the deadline will be unsatisfactory which will add complications," he said.

The Islamic republic has until August 31 to halt its uranium enrichment and reprocessing activities or face the threat of UN sanctions.

Tehran has said it will reply by August 22 to a package of incentives offered by the five permanent members of the UN Security Council plus Germany to halt its uranium enrichment program.

The Islamic republic is the world's fourth-largest crude oil producer and traders fear Iranian energy supplies will be affected if Tehran refuses to back down from international pressure to halt its nuclear programme.