Oil prices spike after Iran seizes yacht
In London, Brent crude for January delivery rose $1.29 to settle at $78.47 on the ICE Futures exchange.
By MARK WILLIAMS
The Associated Press
11/30/2009
Oil prices jumped Monday after Britian said a racing yacht carrying five U.K. nationals had been stopped by Iranian naval vessels and that they are now being held in Iran.
Crude climbed $1.40 to $77.45 a barrel on the New York Mercantile Exchange after being mostly flat for much of the session.
British officials said Monday that the yacht may have strayed inadvertently into Iranian waters when it was stopped last Wednesday.
Prices rose on the specter of some kind of confrontation between the British and the Iranians, one of the world's biggest producer of oil.
Two years ago fifteen British military personnel were seized in the Gulf by Iran. Iran charged them with trespassing in its waters, but all were eventually freed.
The jump in prices comes as the gap between what drivers are paying for gasoline compared with a year ago is widening and figures to get worse between now and the end of the year.
Prices at the pump were $2.629 a gallon on Monday, 80.4 cents more a gallon than a year ago, according to auto club AAA, Wright Express and Oil Price Information Services. That is about $40 more a month for a typical motorist.
The government releases its survey on retail prices late Monday.
Gasoline prices bottomed near $1.61 during the last few days of 2008 as the recession took hold, demand for fuel crumbled and the stock markets tumbled.
Consumers now are paying about $1 billion a day for gasoline, about $300 million more a day for gasoline than they did a year ago.
And in December, for the first time in about 10 years, oil prices are expected to be twice what they were a year ago, says Tom Kloza, chief oil analyst for OPIS.
Crude prices have been trading between $75 and $82 a barrel for the past month or so. Prices hit $33.87 a barrel on Dec. 19.
The rapid rise in prices is worse for consumers this time, however. Before prices doubled in early 2000, a barrel of crude cost about $10.
Prices tumbled $1.61 on Friday and were down as much $5.57, or 7 percent, after Dubai's investment arm, Dubai World, asked for a six-month reprieve on payments for about $60 billion in debt. The drop was the biggest decline in oil prices since April 20.
Energy prices regained some of that ground and by Sunday, the United Arab Emirates took steps to avert any run on banks by panicked depositors.
By Monday, it appeared oil was trading once again on the same factors that have heavily influenced prices for several months — the value of the dollar and global stock markets.
Oil prices usually climb when the dollar falls, as dollar-denominated commodities such as oil and gold become cheaper to investors holding other currencies.
Crude prices rose and fell, following the dollar's strength against the euro.
In other Nymex trading, heating oil for December delivery added 5.6 cents to settle at $2.0181 a gallon. Gasoline added 7.46 cents to settle just above $2 a gallon. Natural gas shed nearly 7 percent, or 34.4 cents to settle at $4.848 per 1,000 cubic feet
In London, Brent crude for January delivery rose $1.29 to settle at $78.47 on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.
Follow The Trucker on Twitter at www.twitter.com/truckertalk.