Oil spikes at $92 on supply fears
Crude oil prices spiked above $92 a barrel Friday on tensions in the Middle East and renewed concerns about supply.
The United States announced new sanctions against Iran Thursday, targeting the elite Revolutionary Guards, which Washington accuses of backing Shiite militants in Iraq. A confrontation between the world’s largest oil consumer and its fourth largest oil producer could upend markets.
Parallel to fears of a broader conflict in the Middle East were new oil supply concerns.
Light, sweet crude for December delivery rose $1.20 to $91.66 a barrel in electronic trade on the New York Mercantile Exchange by afternoon in Europe. It briefly rose to a new trading record of $92.22 during Asian trading.
With the recent gains, the price of oil is closing in on the inflation-adjusted highs hit in early 1980. Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to $101 or more today.
The Nymex crude contract jumped $3.36 on Thursday to settle at $90.46 a barrel — closing above $90 a barrel for the first time.
“With oil taking the $90 hurdle, a price of $100 seems more and more likely, if only for speculative reasons,” Commerzbank commodity analyst Eugen Weinberg told Dow Jones Newswires.
December Brent crude rose 97 cents to $88.45 a barrel on the ICE futures exchange in London, down from an earlier high of $89.30.
“The market is really quite worried about supply,” said Tetsu Emori, commodity markets fund manager at ASTMAX Futures Co. in Tokyo. “Oil is quite imbalanced. It is quite tight.”
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