Oil held near its highest close in over six months today as traders weighed rising risk to Gulf supplies from mounting tension between Iran and the West.
Small draws in weekly US product and crude stocks were overshadowed by fears surrounding the world's fourth-largest oil exporter, which has been holding 15 British sailors and marines since Friday and was hit with new UN sanctions at the weekend.
US light, sweet crude eased 15 cents to $63.93 a barrel by 4.34am Irish time, dipping back after closing above $64.00 a barrel for the first time since September 11th last. London Brent crude shed 3 cents to $65.75 a barrel.
Oil markets remained jittery after prices briefly rose 8 per cent to above $68 late on Tuesday on rumours of a clash between US or British forces and Iran. London and Washington quickly denied any confrontation.
So far there has been no disruption to Iran's daily shipments of around 2.2 million barrels, or any interruption in the one-fifth of global oil that flows through the Strait of Hormuz.