WTI crude oil price fails to find direction, hangs at $100 as Iran tensions heat up

The price of US WTI crude oil is trading back at $100 a barrel early on Friday after the US warns Iran’s leaders against closing the strategic Strait of Hormuz, saying that doing so would provoke a US response, the New York Times reported.

Latest WTI Oil Price

US Light crude oil futures for February 2012 delivery was trading at $100.02 a barrel, 07.20 GMT this morning in electronic trading on the NYMEX. The US oil contract closed off Thursday’s session a $99.10 a barrel, or 1.9 percent lower on the day.

Communication to Iran

The New York Times, citing unnamed US officials, said late on Thursday that the White House has communicated to Iran’s Supreme Leader Ayatollah Ali Khamenei that closing the strait would be a “red line” and provoke a response.

The officials did not provide further details about the covert communication channel, except to say that it was separate from the Swiss government, through which the United States occasionally relays messages to Iran’s leaders.

The United States and its allies have stepped up increasingly harsh sanctions on Iran over its nuclear enrichment program, which they have charged is part of a secret drive to develop nuclear weapons.

Latin America Tour

Iranian President Mahmoud Ahmadinejad on Friday wraps up a four nation tour of Latin America that yielded kind words from ideological allies but no clear offers to help ease Western sanctions against its nuclear program.

The limited results from his tour of Venezuela, Nicaragua, Cuba and Ecuador reinforce the view that Iran will need to rely on diplomatic heavyweights like China or Russia to help stave off sanctions that for the first time threaten its oil income.

On New Year’s Eve, US President Barack Obama signed into law by far the toughest financial sanctions yet against Iran. If fully implemented, they could make it exceedingly difficult for most countries to pay for Iranian oil.

View original here:
WTI crude oil price fails to find direction, hangs at $100 as Iran tensions heat up