Crude oil and other energy futures jumped Monday in the U.S. as geopolitical tensions involving Iran rattled investors. The May contract for light sweet crude gained 63 cents to finish at $62.91 a barrel on the New York Mercantile Exchange. Reformulated gasoline moved 68 cents higher to $2.07 a gallon. Heating oil edged 7 cents higher to $1.78 a gallon. The near-term natural gas contract fell 4 cents in the session to $7.25 per million British thermal unit. Mounting tensions between Iran and the West are generating crude oil supply concerns among energy traders. Last Friday, 15 British marines and sailors were detained by Iranian soldiers for allegedly entering Iranian territorial waters without permission. Over the weekend, various press outlets reported that Iran is considering issuing charges against the seamen. The British and U.S. governments have both called on the Iranian government to release the soldiers immediately. Energy traders are concerned that Iran may use this recent event as an opportunity to take control over busy shipping lanes in the Straight of Hormuz, according to Dennis Gartman, publisher of The Gartman Letter. Roughly 15 million barrels of oil travel through the straight every day, Gartman wrote in a report. Relations between Iran and the West were already unsettled because of Iran's persistent defiance of a United Nations mandate to halt its uranium-enrichment program. On Saturday the UN Security Council voted unanimously to broaden economic sanctions against Iran over its nuclear program. The new sanctions will target Iranian weapons exports and financial institutions.
Iran responded to the new sanctions by announcing on Sunday that it will reduce its cooperation with nuclear inspectors from the International Atomic Energy Agency. It also reiterated that it has no intention of suspending its atomic plans. Also supporting energy prices were reports that various Australian oil and gas companies are temporarily shutting in crude oil production from oil fields in Western Australia ahead of the arrival of cyclone Kara. Roughly 160,000 barrels per day have been taken off line, according to analysts at Barclays Capital. Energy stocks finished the trading session mostly higher on the back of the higher commodity prices. The CBOE Oil Index climbed 0.8% to 657.82. ConocoPhillips ( COP - Get Report) advanced 0.5% to $69.56. Chevron ( CVX - Get Report) gained 1% in the session to $74.40, and Exxon Mobil ( XOM - Get Report) finished 0.6% ahead at $75.45. Elsewhere, energy-investment firm Tortoise Energy Infrastructure ( TYG - Get Report) was downgraded by Ferris Baker Watts to neutral from buy, and its shares fell 0.9% at $38.58. Tesoro Petroleum ( TSO) was downgraded by Bear Stearns to peer perform from outperform, and by Deutsche Securities to sell from hold. Tesoro's stock was down 1.4% at $99.46.