Digg



del.icio.us



Newsvine



Reddit



Facebook SINGAPORE (Reuters)  Oil prices were up nearly $1 in Asian trading Wednesday, easing back after spiking more than $5 a barrel on rumors that Iran had fired a missile at a U.S. ship in the Persian Gulf. The U.S. military denied the reports. Lt. Cmdr. Charlie Brown of the U.S. Navy 5th Fleet said all ships in the Gulf had been checked and the rumors were untrue. U.S. DENIES ACTION: Iran did not fire at U.S. warship Still, rumors about a military confrontation spurred panic buying in after-hours trading, Dow Jones Newswires reported, sending oil prices above $68 in a matter of minutes. Rising tensions between Iran and the West have created a potentially dangerous situation in the Gulf and markets are jumpy. Prices fell back within a couple hours, although they remained higher than Tuesday's settlement price of $62.93 a barrel. Light, sweet crude for May delivery was up 96 cents at $63.89 a barrel in electronic trading on the New York Mercantile exchange in Singapore. "The major concern is that if the rumor had been true, you'd have a major disruption to supply," said Andrew Harrington, an analyst with ANZ Global Natural Resources in Sydney. "You have about a quarter of the world oil coming through the Straits of Hormuz and any military conflict would severely disrupt those supplies, which obviously sees the price spike." The spike indicates the nervousness in markets, he said. "The political premium had been taken out of the price, and as soon as any signs of new development takes place, they get put back into the price," Harrington said. Traders were awaiting U.S. government oil inventories data due later in the day. The U.S. Energy Department's report is expected to show a gain of 1.1 million barrels in crude oil inventories in week ending March 23, according to analysts polled by Dow Jones Newswires. Gasoline supplies are expected to decline by an average of 1.8 million barrels, while distillate stocks — which include heating oil and diesel fuel — are expected to dip by 800,000 barrels. But the oil data most likely would be overshadowed by continued concerns about the Mideast, analysts said. Tehran continues to hold 15 British sailors it captured on Friday, giving no indications of their whereabouts despite repeated pleas for their release from Britain, the United States and the European Union. Also, the U.S. kicked off a military training operation in the Persian Gulf on Tuesday that commanders said was meant to send a warning to Iran. The operations are the largest show of U.S. force in the Gulf since the 2003 invasion of Iraq. "A large part of the oil market, at least in the immediate future, will be very much focused on the events in the Middle East," Harrington said. "That will take precedence." In other Nymex trading, heating oil futures up 2.54 cents to $1.8118 a gallon (3.8 liters) while natural gas prices climbed 9.5 cents to $7.598 per 1,000 cubic feet. Copyright 2007 Reuters Limited. Click for Restrictions. Share this story: Digg del.icio.us Newsvine Reddit Facebook Conversation guidelines: USA TODAY welcomes your thoughts, stories and information related to this article. Please stay on topic and be respectful of others. Keep the conversation appropriate for interested readers across the map.