Chart: Crude Oil (WTI) and Crude Oil Diffusion Index (DI)
Headline: Oil Prices May Have Hit Bottom: Expert Sees Energy Prices Rising
Global energy prices are moving sharply higher Tuesday morning on news that Iran was threatening to disrupt oil supplies by blocking the Strait of Hormuz waterway. Brent crude topped $100 a barrel for the first time in three weeks and U.S. oil futures for August delivery gained nearly 5 percent mid-morning before easing to $87.71 a barrel. On Monday, Iran scheduled drills to test missiles that were capable of hitting targets as far away as Israel, stoking fears that the country is trying to produce a nuclear weapon, according to a Wall Street Journal story. The New York Times reports Tuesday that the U.S. Navy has quietly been increasing its presence in the Persian Gulf to discourage Iran from freezing ship traffic in the Strait. Iran's National Security and Foreign Policy Committee has also introduced a bill that would try to stop oil tankers from passing through the Strait of Hormuz, a move seen by analysts as retaliation by Iran against European nations that abide by new economic sanctions. Europe implemented tougher sanctions against Tehran July 1 over the country's nuclear energy program, which has made it difficult for Iran, OPEC's second-largest oil producer, to find buyers of its crude. (See: The Looming Threat to Gas Prices: Strait of Hormuz Explained) Beth Heinsohn, a senior news editor at OPIS, says rising U.S. oil production in North Dakota and South Texas insulates parts of the country from potential oil shocks. But consumers on the East Coast are more likely to see higher prices because local refiners are more dependent on crude imports from overseas.Source: finance.yahoo.com
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