Oil Jitters
March 28th, 2007Via: Bloomberg:
Oil rose for a seventh day in New York, climbing close to $65 a barrel, on concern a dispute over Iran’s capture of British servicemen would escalate, disrupting supplies from the Middle East.
Oil surged $5 in seven minutes late yesterday on speculation the U.K. would mount a rescue attempt, and rose today by more than $2 a barrel. U.S. stockpiles of gasoline were already falling before the standoff between Britain and Iran, and analysts expect the Department of Energy to report today they fell again last week, the seventh straight decline.
“It shows how nervous and twitchy people are about the situation in Iran,” said Michael Davies, an analyst at the commodity broker Sucden (U.K.) Ltd. in London. “Military strikes are a possibility, although it’s a long way off, if tensions keep rising. You can guarantee more people will take outright bets on prices rising if this continues.”
Almost a quarter of the world’s oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf. Relations between Iran, which sits on the world’s second-largest proven reserves, and western governments are already frayed because of the country’s nuclear program.
