Crude Oil touches Record High riding on Iran US Tension

Crude oil in New York touched an intraday record high riding on the tension between the U.S. and Iran over Iran’s nuclear program which may lead to military conflict, interrupting supplies from the world’s fourth-largest producer.

Crude-oil bounced within 10 cents of a record high on Tuesday, stretching gains above a barrel as fears grew of possible military action against Iran and a major Nigerian supply outage dragged into a third month.

The rising of Crude-oil futures trade - occurring within in single day by hitting a high of .88 a barrel Tuesday in electronic trading on the New York Mercantile Exchange, marked a new high for the May delivery contract. The new high exceeded the previous record .85 set August 30 after Hurricane Katrina wrecked oil and natural gas infrastructure in the Gulf of Mexico.-the contract closed that day at .81; amid worries about to supply interruptions in Nigeria and international tension over Iran’s nuclear program.

Crude oil for May delivery reached to a great extent of 48 cents or 0.7 percent a barrel in Asian electronic trading on the New York Mercantile Exchange. The Crude was trading for .83 a barrel at 9:07 a.m. in London. A day before, futures ended trading at .40, the highest closing price since trading started in 1983. Futures for delivery in June, which will become the front-month on Friday, are already trading at .32 a barrel.

Tobias Merath, an analyst for Credit Suisse in Zurich said, "Iran is still the main driver," he added, "Many Europeans are back after the holidays, and they’re jumping on the trend now." The Swiss bank is predicting crude at between and in three months, with a level of a barrel taken in as the top.

Iran’s top nuclear official-Ali Larijani said that the demands to freeze the nuclear program were totally illogical. Western governments, headed by US, worried that Iran may be planning to build nuclear weapons, already have referred it to the U.N. Security Council.

Former Iranian President Akbar Hashemi Rafsanjani said on Monday that Iran, which announced last week that it had enriched uranium for use in power stations, would continue to pursue its nuclear program.

Mohammed El Baradei, head of the U.N.’s International Atomic Energy Agency, at the time of his visit to Iran last week failed to convince the Tehran government to halt its nuclear program as Iran’s nuclear ambitions are peaceful.

Avigdor Lieberman, the head of the Israel Beitenu Party who will possibly become the country’s internal security minister, said yesterday, Israel possibly step forward to stop Iran from developing nuclear weapons. He said that the Israeli government would be forced to act on its own if the U.S. and Europe don’t. Whereas Iran’s President Mahmoud Ahmadinejad called Israel a ``permanent threat’’ and said the Israeli regime "is on the road to being eliminated."

Saudi Arabia’s Prince Turki al-Faisal, the kingdom’s new ambassador to the U.S said that a U.S. military attack on Iran would not eradicate the nuclear threat and would trigger retaliation against American interests worldwide.

However, the US authorities will meet with world powers on Tuesday to consider targeted sanctions against Iran and have said they want the U.N. Security Council to be ready to take strong wise action, including standards such as a freeze on assets and visa curbs.

Gerard Burg, an economist at the National Australia Bank (NAB) said, "The reality is that if there was any attack on Iran, there would certainly be a major disruption to supplies.