Oil Again Marches Higher

British officials now say they will "freeze all bilateral business" with Iran until the sailors are released. They also unveiled a detailed map depicting their version of where the sailors were located at the time of their capture. In a possible sign of appeasement, Iran said it will release the only female sailor in the group.

Also adding to the tension are new sanctions against Iran, which were unanimously approved on Saturday by the U.N. Security Council. The new sanctions, intended to pressure Tehran to halt its uranium enrichment program, will target Iranian weapons exports and financial institutions. Iranian President Mahmoud Ahmadinejad remains adamant that Iran will continue to pursue its nuclear ambitions.

Elsewhere, the Energy Information Administration revealed new petroleum inventory figures that were mostly in line with analyst estimates. Crude inventories decreased by 900,000 barrels during the week ended March 23. Analysts at Bank of America were expecting crude inventories to remain unchanged.

Motor gasoline inventories declined by 300,000 barrels, whereas analysts were expecting a 1.5-million barrel draw. Distillate inventories dropped by 700,000 barrels, about half of what was expected.

The EIA released figures earlier this week showing that total energy demand in the U.S. fell in 2006 for the first time since 2001. "With overall energy use down and renewable energy use up ... the 2006 data does represent something of a small potential starting step away from the carbon economy," analysts at Barclays Capital wrote in a report.