Crude's Win Streak Kept Alive

Oil rises $1.95 to $66.03 a barrel.
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Oil futures rose for an eighth consecutive session and jumped to their highest price in nearly four months as the showdown between Britain and Iran over 15 detained British soldiers continued to rattle the energy market.

The May contract for light sweet crude climbed $1.95 to $66.03 a barrel in active trading at the New York Mercantile Exchange. Reformulated gasoline finished 7 cents higher at $2.13 a gallon, and heating oil gained 4 cents to $1.87 a gallon.

Natural gas for May delivery rose 5 cents to finish at $7.61 per million British thermal unit. The April natural gas contract expired after the close of Wednesday's trading session.

Tensions between Britain and Iran escalated yet again when a representative for the British government said officials were working to convince the United Nations to get involved in the negotiations for the release of the soldiers.

Iran reacted by delaying its offer to free the only female service member in the group. While attending a meeting of the Arab League in Saudi Arabia, Iranian foreign minister Manouchehr Mottaki said that Britain must admit that its soldiers had breached Iran's territorial waters in order to end the standoff.

Meanwhile, war games staged by the U.S. Navy aircraft carrier groups Eisenhower and Stennis in the Persian Gulf are wrapping up. The carrier group Nimitz has been ordered to sail from San Diego and replace the Eisenhower.

A Navy representative said that the Eisenhower and Nimitz carrier groups won't overlap each other in the Persian Gulf. Rumors have been swirling for weeks that the U.S. Navy was planning to add more carriers to the existing fleet there in a large display of force.

Elsewhere, the Energy Information Administration revealed new natural gas inventory figures that were mostly in line with analyst estimates. Natural gas inventories fell by 22 billion cubic feet during the week ended March 23. Analysts were expecting a 16 bcf draw.

Natural gas prices are up roughly 18% since the beginning of the year even though recent inventory figures have been relatively bearish.

According to Edward Meir, energy analyst at Man Financial, energy traders reacted to the warm temperatures this past winter by taking large short positions on natural gas. However, recent revelations that natural gas imports from Canada have been significantly smaller than normal are causing some analysts to take a more bullish stance.

This probably encouraged traders to cover their short positions in recent weeks, pushing natural gas prices higher.

Energy stocks finished mostly higher. The

CBOE Oil Index

rose 0.6% to 664.48.

ConocoPhillips

(COP) - Get Report

was up slightly at $69.21,

Chevron

(CVX) - Get Report

climbed 1.2% to $74.95, and

Exxon Mobil

(XOM) - Get Report

gained 0.9% to $76.24.

U.S. Bioenergy

(USBE)

was upgraded by Piper Jafray to outperform from market perform, lifting its shares 5.3% to $12.28.

Capital One Southcoast downgraded shares of seismic company

Dawson Geohysical

(DWSN) - Get Report

to hold from buy, sending it to a 5.3% loss at $49.97.