Oil Prices Surge After Israeli Comments on Iran
June 06, 2008
Oil rose by more than $3 a barrel to above $131 Friday, bringing gains in the last two days to $9 as the dollar weakened further on a jump in the U.S. jobless rate, Reuters reported.
Comments from Israel's transport minister that an attack on Iranian nuclear sites looked "unavoidable" given the apparent failure of sanctions to deny Tehran technology with bomb-making potential also helped drive prices higher. This was the most explicit threat yet against Iran from Prime Minister Ehud Olmert's government.
Skyrocketing gas prices have prompted a dramatic shift in U.S. auto sales, from trucks and SUVs to smaller, fuel-efficient cars.
Oil surged $6 in after-hours trading Thursday in the U.S., erasing two days of sharp losses triggered by worries that high oil prices were starting to dent demand. Crude hit a record high of $135 last month.
The remarks from the Israeli government gave added momentum to the rally, Olivier Jakob, an analyst with Petromatrix. "Financial money is flowing back into oil and commodities," Jakob told Reuters.
Investors have used oil and other commodities as a hedge against the weaker dollar and inflation as the housing crisis and high fuel prices batter the U.S. economy.
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