West Texas Intermediate (WTI) light sweet crude oil for February delivery was gaining $1.21 to $102.08 a barrel and Brent crude oil for March delivery was up 94 cents to $113.
This, amid escalating fears that Iran could retaliate against European Union and U.S. sanctions over its nuclear program by closing the crucial Strait of Hormuz. The waterway, nestled between the Persian Gulf and Gulf of Oman, allows the passage of as many as 20 million barrels of crude oil a day on tankers. Meanwhile, sanctions against the Islamic Republic would put a significant dent in world supply as well, as Iran produces roughly 4 million barrels a day of oil.
Specialist intelligence agency Exclusive Analysis says that the probability of a unilateral Israeli strike will increase to over 50% and rising, from the now 10% chance, between about March and June 2012 and onwards if sanctions and Israeli covert disruption operations don't result in Iranian policy change or significant delays to Iran's nuclear program.Such strikes could lead to a disruption to international shipping, including oil tankers, especially in the Strait of Hormuz, says Exclusive Analysis analysts. "Israel sees Iran's nuclear program as posing an existential threat," they say in a report. "If neither tougher sanctions nor covert operations succeed in changing Iranian policy or disrupting the programme, Israel is likely to initiate military action, before uranium enrichment is fully established at Fordow." A sustained attack could lead Iran to declare the Straits of Hormuz closed and to lay down mines to ward off attacks, according to the report. In Nigeria, the top-producing oil region of Africa, oil workers have been threatening to shutdown oil production amid a nationwide strike of the elimination of fuel subsidies that has resulted in skyrocketing petrol prices. "Strikes in Nigeria are now causing the shutdown of several oil platforms, so we question whether the bears can really crack $100," says Schork Report energy analyst Hamza Khan. Global supply fears were overshadowing a big build-up in U.S. crude inventories last week, which had indicated a possible cooling of U.S. demand. Stocks surged by about 5 million barrels in the week ended Jan. 6, which was well above the 1 million barrel decline in crude stocks that analysts surveyed by Platts had been expecting. Energy stocks were mixed in premarket trading Thursday. BP (BP) was down 0.7% to $43.76; Exxon Mobil (XOM) was down 0.6% to $84.60; Apache (APA) was rising 0.9% to $97.07; Triangle Petroleum (TPLM) was up 0.4% to $7.07; ConocoPhillips (COP) was down 0.8% to $71.41; Royal Dutch Shell (RDS.A) was giving up 2.1% to $70.21; and Statoil (STO) was rising 1% to $25.52. -- Written by Andrea Tse in New York.
>To contact the writer of this article, click here: Andrea Tse.
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