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Crude Prices Hits $64.45/Barrel; Interior Dept. Opens Alaska for Oil Development

World oil prices pushed higher this week as Iran prepares to resume its nuclear research program. To ease the tightening of supplies, the U.S. Interior Department opened up Alaskan land for oil development.

Crude Prices Hit $64.45/Barrel; Interior Dept. Opens Alaska for Oil Development

World oil prices pushed higher, gaining 51 cents to $64.45 per barrel in electronic dealing on Thursday. In London, the price of Brent North Sea crude for February delivery jumped 68 cents to $62.85 per barrel. China's central bank said it has no plan to sell off its US dollar holdings but it may use some of the country's massive foreign exchange reserves to buy oil, state media reported.

Iran's defiant stand on its nuclear program sparked unease over supplies in the Middle East. Its plant to resume nuclear research activities after a two-year suspension has prompted warnings from world powers that OPEC's second-biggest oil exporter could be referred to the UN Security Council to face possible sanctions.

Crude inventories fell 2.9 million barrels to total 318.7 million in the week that ended January 6, the DoE said. Oil traders had expected a smaller drop of 600,000 barrels. Distillate stocks, used to make heating oil and diesel fuel, rose 4.9 million barrels to 133.8 million, compared with forecasts for a rise of 2.2 million, as recent temperate winter weather curbed US demand for heating oil.

To ease tightened supply, the Interior Department is opening nearly a-half million acres of federal land in Alaska's North Slope to oil and gas development, allowing oil development in virtually all of the wetlands surrounding a lake in the northeast corner of the National Petroleum Reserve.

The Bureau of Land Management says no surface facilities, except for pipelines, will be allowed on thousands of acres around the lake as a way to protect caribou calving and geese molting areas.

But environmentalists say the restrictions are inadequate and not good for either the geese or the caribou. The Petroleum Reserve, set aside by Washington in 1923, is west of the Prudhoe Bay oil fields. The Arctic National Wildlife Refuge, which has been at the center of a drilling dispute, is east of Prudhoe Bay.