Oil hit a record trading high Friday as tensions with Iran, the possibility of renewed violence in Nigeria and a planned labor strike in Brazil threatened already tight supplies.
Light sweet crude for August delivery was up $5 to $146.64 a barrel in electronic trading on the New York Mercantile Exchange. Earlier prices touched a new trading record of $146.90, eclipsing the mark of $145.85 set July 3.
Oil rallied more than $5 a barrel late Thursday after the oil producing nation of Iran conducted a second missile test in the Persian Gulf Thursday evening, increasing tensions with Israel and the West over its nuclear program.
One of the great fears facing oil investors is the possibility that Iran could blockade the nearby Strait of Hormuz, a key waterway that carries a large percentage of the world's oil traffic.
Secretary of State Condoleezza Rice had earlier warned Iran that the United States would defend its allies. Iran then responded with another missile launch.
Unrest in Nigeria, Africa's largest oil producer, has also set investors on edge. The nation's main rebel group threatened to renew attacks after the British expressed support for the country's current government. Militants have commonly targeted Nigeria's oil infrastructure.
Also adding to concerns was a potential labor strike against Brazilian oil company Petroleo Brasileiro. Brazil's Oil Workers Confederation said it was planning a 5-day strike that could affect 80 percent of the South American country's oil supply.
Also adding to concerns was a potential labor strike against Brazilian oil company Petroleo Brasileiro. Brazil's Oil Workers Confederation said it was planning a 5-day strike that could affect 80 percent of the South American country's oil supply.
"There's always a fear premium in pricing. The tensions in Iran and the threat of supply disruption will help support oil prices," said Jeff Brown, managing director of FACTS Global Energy in Singapore told The Associated Press.
JBC Energy in Vienna, Austria, told AP the news about Iran, Nigeria, as well as a reported threat of a strike by oil workers in Brazil were "enough to wake the market from its two-day slumber."
Still, while supply worries abound and the U.S. dollar remains weak compared with levels a year ago, many investors are seeing reasons to believe that oil might be peaking because of resistance to the record-level prices.
"Here in the United States, airplanes are being grounded. Travel has definitely changed. People are looking at hybrids," James Cordier, president of Tampa, Florida-based trading firms Liberty Trading Group and OptionSellers.com, told AP.
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Source: CNN
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