MW:Crude futures rise on Israel rhetoric over Iran
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) — U.S. benchmark crude-oil futures rose in European trading hours, adding to gains from the Asian session, as supply jitters hit the market over rising tensions between Iran and Israel.
Nymex crude for September delivery CLU2 +0.83% rose 62 cents, or 0.7%, to $93.49. Crude fell 0.5% on Friday amid fresh worries about global demand from the International Energy Agency, but on the week, it rose 1.6%.
Geopolitical tensions were in play on Monday. Analysts at JBC Energy said Brent crude hit a new high in the current rally above $114 a barrel on ICE Futures in London. Brent was last up $1.61, or 1.4%, to $114.58 a barrel.
In a research note, JBC analysts said “intensifying supply jitters spooked the markets after news reports out of Israel indicating a rising possibility of military intervention in Iran.”
Israel’s deputy foreign minister Danny Ayalon reportedly said Sunday that the international community should admit diplomatic efforts to stop Iran’s nuclear program have failed. He said Iran shouldn’t be given more than a few weeks to halt its uranium enrichment.
Meanwhile, Prime Minister Binyamin Netanyahu reportedly said earlier Sunday that Iran cannot be allowed to have a nuclear weapon, which remains the biggest threat to his country.
“While the tone out of Israel has indeed become more aggressive, we still think that Israel is unlikely to take unilateral military action against Iran,” said JGB analysts.
“However, with U.S. elections only 12 weeks away, this could of course be a political move by Israel to pressure the current U.S. administration to show its hand,” they said in a research note.
Oil was undermined last week by a report from the IEA that pointed to waning demand for oil against a bleak economic backdrop, trimming its energy-growth outlook for the rest of the year.
In other energy markets, natural-gas futures NGU2 -0.25% fell 3 cents, or 1%, to $2.74 per million British thermal units. Last week the commodity dropped nearly 4%.
September gasoline RBU2 +1.12% rose 3 cents, or 1%, to $3.04 a gallon. September heating oil HOU2 +0.84% rose 2 cents, or 0.8%, to $3.05 a gallon. Gasoline added more than 2% last week, while heating oil rose over 3%.
