Oil Rises $4 on Israeli Army Exercise
By TATYANA SHUMSKY and GREGORY MEYERJune 20, 2008 Crude-oil futures jumped Friday as traders mulled a report hinting at a showdown between Israel and Iran and expressed uncertainty over the impact of an international oil summit in Saudi Arabia this weekend.
Light, sweet crude for July delivery was recently up $3.11, or 2.4%, at $135.04 a barrel on the New York Mercantile Exchange after briefly jumping as high as $136.08. The July contract expires Friday. more actively traded August Nymex crude was up $3.22, or 2.4%, to $135.82 a barrel.
August Brent crude on the ICE futures exchange rose $3.08 to $135.08 a barrel.
The New York Times reported in Friday's editions that Israel this month carried out an airborne military exercise that American officials say looked like a "rehearsal" for a potential bombing attack on Iran's controversial nuclear facilities.
International tensions over Iran, the second-largest crude producer in the Organization of Petroleum Exporting Countries, have helped rattle the market amid oil's rise of more than 40% this year. Iran also lies on the Strait of Hormuz, a crucial conduit for the export of Gulf crude.
"At the very least it's noteworthy and potentially concerning," said Eric Wittenauer, an energy analyst at Wachovia Securities in St. Louis. "However, at this point in time the imminence of an attack isn't there. Certainly geopolitical tension in the region can prove price-supportive."
The market partly recovered from a fall precipitated Thursday by China's decision to raise the domestic price of gasoline by 17% and diesel by 18%.
"It gave us a one-day selloff," said Walter Zimmermann, an analyst at brokerage ICAP/United Energy in Jersey City, N.J. "It remains to be seen whether that is going to translate into a decrease in demand."
On Sunday, Saudi Arabia has scheduled a summit of major oil producers and consumers. Traders continue to search for clarity over whether the meeting will result in a production boost.
OPEC President Chakib Khelil said Friday that a production increase doesn't make sense.
"To ask the oil producers to increase their output is illogical and irrational," Mr. Khelil told the Algerie Presse Service. Earlier reports have indicated Saudi Arabia, OPEC's de facto leader, will increase output by at least 200,000 barrels a day after the meeting.
Front-month July reformulated gasoline blendstock, or RBOB, rose 5.89 cents, or 1.8% to $3.4115 a gallon. July heating oil rose 9.38 cents, or 2.5%, to $3.8073 a gallon.
By TATYANA SHUMSKY and GREGORY MEYERJune 20, 2008 Crude-oil futures jumped Friday as traders mulled a report hinting at a showdown between Israel and Iran and expressed uncertainty over the impact of an international oil summit in Saudi Arabia this weekend.
Light, sweet crude for July delivery was recently up $3.11, or 2.4%, at $135.04 a barrel on the New York Mercantile Exchange after briefly jumping as high as $136.08. The July contract expires Friday. more actively traded August Nymex crude was up $3.22, or 2.4%, to $135.82 a barrel.
August Brent crude on the ICE futures exchange rose $3.08 to $135.08 a barrel.
The New York Times reported in Friday's editions that Israel this month carried out an airborne military exercise that American officials say looked like a "rehearsal" for a potential bombing attack on Iran's controversial nuclear facilities.
International tensions over Iran, the second-largest crude producer in the Organization of Petroleum Exporting Countries, have helped rattle the market amid oil's rise of more than 40% this year. Iran also lies on the Strait of Hormuz, a crucial conduit for the export of Gulf crude.
"At the very least it's noteworthy and potentially concerning," said Eric Wittenauer, an energy analyst at Wachovia Securities in St. Louis. "However, at this point in time the imminence of an attack isn't there. Certainly geopolitical tension in the region can prove price-supportive."
The market partly recovered from a fall precipitated Thursday by China's decision to raise the domestic price of gasoline by 17% and diesel by 18%.
"It gave us a one-day selloff," said Walter Zimmermann, an analyst at brokerage ICAP/United Energy in Jersey City, N.J. "It remains to be seen whether that is going to translate into a decrease in demand."
On Sunday, Saudi Arabia has scheduled a summit of major oil producers and consumers. Traders continue to search for clarity over whether the meeting will result in a production boost.
OPEC President Chakib Khelil said Friday that a production increase doesn't make sense.
"To ask the oil producers to increase their output is illogical and irrational," Mr. Khelil told the Algerie Presse Service. Earlier reports have indicated Saudi Arabia, OPEC's de facto leader, will increase output by at least 200,000 barrels a day after the meeting.
Front-month July reformulated gasoline blendstock, or RBOB, rose 5.89 cents, or 1.8% to $3.4115 a gallon. July heating oil rose 9.38 cents, or 2.5%, to $3.8073 a gallon.
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