WTI oil price trading near $96 as tensions over Iran resurface

WTI oil prices are trading close to $96 a barrel early this morning as tensions over Iran’s nuclear program resurface, adding fuel to a surge higher for both WTI and Brent oil futures, while stock markets remain subdued.

Latest WTI Oil Price

US Light crude oil futures for December 2011 delivery was trading at $95.85 a barrel, 07.15 GMT this morning in electronic trading on the NYMEX. The US oil contract closed yesterday’s trading session up 1.5 percent, closing at $95.86.

Iran Nuclear Tensions

WTI oil prices rallied to a seven week high this morning as bearish investors rushed to cover their bets amid a war of words between Washington, Tel Aviv and Tehran over Iran’s nuclear programme.

The UN’s nuclear watchdog will publish new details on Wednesday on alleged Iranian work on an advanced design for a nuclear warhead developed with the help of a former Soviet scientist, according to nuclear experts.

Iran is a member of OPEC and traders are starting to worry that the IAEA report could lead to an attack by Israel on Tehran’s nuclear facilities. An attack could disrupt oil production and lead to closure of the Strait of Hormuz, the gateway for oil exports from key OPEC countries in the Middle East, including Saudi Arabia.

Mahmoud Ahmadinejad, Iran’s president, accused Israel and America yesterday of drumming up global support for a military strike on its nuclear facilities, which his country claims are for civilian and medical purposes only.

Mr Ahmadinejad added that Washington wanted to “save the Zionist entity, but it will not be able to do so”. “This entity [Israel] can be compared to a kidney transplanted in a body that rejected it. It will collapse and its end will be near,” he said.

His remarks came after Shimon Peres, the Israeli president, said: “The possibility of a military attack against Iran is now closer to being applied than the application of a diplomatic option.”

“The smart oil traders I know aren’t talking about anything else.” said Seth Kleinman, oil and gas strategist at Citigroup, London.

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WTI oil price trading near $96 as tensions over Iran resurface