Oil jumps to near $86 as Iran could block seaway

Associated Press Modified: July 3, 2012 at 8:31 am •  Published: July 3, 2012

"U.S. and E.U. sanctions against Iran are now in effect, and look to have a greater impact than we had anticipated," said Goldman Sachs, which forecasts oil will surge to $115 within three months. "The loss in Iranian exports could soon rival the loss of Libyan crude oil supplies last year."

Additionally, Iran is mulling the option of blocking access by oil tankers to the Strait of Hormuz and a weeklong strike by oil workers in Norway was seen cutting into production at the world's eighth-largest oil exporter.

"The recovery has been aided by supply-side risks, which until recently tended to be overlooked," said analysts at Commerzbank in Frankfurt.

In other energy trading, heating oil was up 5.44 cents at $2.7303 per gallon while gasoline futures advanced 5.38 cents at $2.6777 per gallon. Natural gas lost 2.6 cents at $2.798 per 1,000 cubic feet.


Alex Kennedy in Singapore contributed to this report.

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