Crude Falls As Tensions Ease

Crude oil prices fell on Wednesday after Iran announced it would turn over 15 British sailors and marines that it had detained since March 23.

The release of the soldiers proved to be a sudden end to an extremely tense standoff that some analysts say threatened to spark military action against Iran and cut off oil exports from the Middle East to the rest of the world.

After falling nearly $2 a barrel in early trading, the May contract for light sweet crude reversed course midsession, ultimately closing 26 cents lower at $64.38 a barrel on the New York Mercantile Exchange. The decline came on top of a $1.30 drop in crude futures on Tuesday.

Reformulated gasoline advanced 9 cents to $2.11 a gallon. Heating oil gained 2 cents, finishing at $1.86 a gallon, and natural gas climbed 9 cents to $7.52 per million British thermal units.

Many analysts say that Iran's detention of the British soldiers during a period of high tensions in the region was probably a strategic maneuver.

"It does seem more and more clear that Iran wanted to push this issue, and that the hostage taking was premeditated and was not an accident," according to Dennis Gartman, publisher of The Gartman Letter.

Some analysts think that Iran did it to boost oil prices and feed its struggling economy. Others think it was simply a display of strength at a time when foreign countries are pressuring Iran over its nuclear enrichment program.