Oil prices near US$108 after Saudi Arabia denies report of pipeline blast


SINGAPORE–Oil prices fell slightly to near US$108 a barrel Friday in Asia after Saudi Arabia denied an Iranian media report of an explosion at a Saudi pipeline. Benchmark oil for April delivery was down 41 cents to US$108.43 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose US$1.77 to US$108.84 per barrel in New York on Thursday. Brent crude was down 55 cents to US$125.65 per barrel in London.

Crude jumped to US$110.55 earlier in the day after an unconfirmed Iranian media report of a pipeline explosion in Saudi Arabia. Saudi officials later denied the report. In other energy trading, heating oil fell 1.8 cents to US$3.26 per gallon and gasoline futures were down 2.9 cents at US$3.32 per gallon. Natural gas rose 0.2 cent at US$2.47 per 1,000 cubic feet.

Oil prices have risen from US$96 last month amid fears that conflict over Iran’s nuclear program could trigger a disruption in global crude supplies. The U.S. and Europe are imposing sanctions on Iran while the Middle Eastern country has threatened to cut supplies to some countries and halt oil tankers passing through the Persian Gulf’s Strait of Hormuz. Israel said Thursday it plans to soon test-fire a new ballistic interceptor missile. Israeli Prime Minister Benjamin Netanyahu is scheduled to meet with U.S. President Barack Obama on Monday to discuss Iran. Signs of an improving U.S. economy have also bolster investor optimism and crude prices. The government said Thursday that applications for unemployment benefits hit a four-year low while spending on residential construction rose and major retailers reported stronger-than-expected sales for February. “Investors were buying on Iran fears and on general expectations for a stronger economy,” energy consultant Cameron Hanover said in a report.

Some analysts are more optimistic that the U.S. economy can continue to improve despite higher fuel costs. U.S. retail gasoline prices rose to an average of US$3.74 per gallon this week, 31 cents higher than a month ago.