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Oil zig-zags, closes up on Iran, economy concerns

Oil has been rising this year as Western nations confront Iran over its nuclear program. They fear that Iran is building a weapon, though it denies the claim. Western leaders are trying to cut off Iran's oil revenues through a variety of sanctions, in hopes of forcing it to negotiate.

The Associated Press

3/26/2012

NEW YORK — Oil prices zig-zagged Monday as investors weighed concerns over global economic growth against possible disruptions in crude supplies due to an international standoff over Iran's nuclear program.

Benchmark crude increased 16 cents to finish at $107.03 per barrel on the New York Mercantile Exchange, after it fell 20 cents to $106.67 a barrel in afternoon trading and it hit a day high of $107.33 and a low of $106.19 earlier in the session.

In London, Brent crude for May delivery added 19 cents at $125.32 per barrel on the ICE Futures exchange.

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Oil has been rising this year as Western nations confront Iran over its nuclear program. They fear that Iran is building a weapon, though it denies the claim. Western leaders are trying to cut off Iran's oil revenues through a variety of sanctions, in hopes of forcing it to negotiate.

But signs of tepid crude demand in the U.S. and Europe and slowing economic growth in China were limiting gains and weighing on equity markets. Analysts are also concerned that higher fuel costs will undermine consumer spending and trigger inflation

Representatives from the U.S. and five other nations are expected to meet with Iran in April for a new round of talks about its nuclear program, diplomats told The Associated Press. The country turned away international inspectors in February.

Meanwhile, natural gas prices are close to hitting a 10-year low. The futures contract dropped 2.5 cents to $2.25 per 1,000 cubic feet in midday trading. It fell as low as $2.224 per 1,000 cubic feet earlier in the day.

Natural gas prices have plummeted this year due to a recent production boom and unseasonably warm temperatures. Analysts say that U.S. has so much gas that storage facilities may run out of space.

"If there isn't any place to put it, then (producers) are going to be burning it off instead," PFGBest analyst Phil Flynn said.

In other energy trading, heating oil added 0.82 cent to $3.2183 per gallon and gasoline futures increased by 1.99 cents to $3.4051 per gallon.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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