Wednesday March 28, 2007

Crude oil spikes briefly to $68 on Iran worries

today.reuters.com :

U.S. crude oil futures briefly shot up more than $5 Tuesday afternoon to trade above $68 a barrel, the highest price for front-month since September 6, 2006, on concerns over Iran. Asked to comment after the price spike, the U.S. Navy said there was nothing to substantiate a rumor of an Iran strike on a U.S. ship, and the White House said there was nothing to indicate any incident taking place regarding Iran.

bloomberg.com :

Crude oil in New York rose in electronic trading on speculation of a confrontation in the Persian Gulf between U.S. or British forces and Iran. "The rumor is that the Brits went in for a rescue attempt on the Royal Marines and Navy guys," said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach California, referring to 15 British military personnel seized by Iran on March 23.

Prices erased most of their after-hours gain after the White House, State Department and the head of the U.S. command that oversees military operations in the Middle East, said they had no information about a naval incident between Iran and the U.S.

Crude oil traded at $64.12 a barrel at 6:24 p.m. in New York Mercantile Exchange electronic trading, up $1.19 from the day's settlement price of $62.93. The settlement price is set after the close of floor trading at 2:30 p.m. New York time. Transactions after 6 p.m. are considered part of the next-day's trading. Five trades were done between $68 and $68.09 a barrel just before 5 p.m., for the highest intraday price since September.

"The reaction shows that we're nervous and not prepared for a military confrontation with Iran," said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. "We haven't priced in the risk of a war after all."

(2007-03-28 07:34:19 SGT) [Energy] Permalink

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