Oil traded near a two-week high in New York as the prospect of escalating tensions between Iran and Western nations spurred speculation of supply disruptions in the Persian Gulf.
Futures reached their highest price since Jan. 31, erasing earlier losses. Standard & Poor’s said in a report today that Iran might respond to sanctions by slowing shipping through the Strait of Hormuz with such obstructions to traffic as tanker inspections and boarding of merchant ships.
“Such low-scale provocation and simmering tension would in our view keep oil prices at their currently high level,” Standard & Poor’s said. “This is because markets would increasingly view the specter of armed conflict as a real, if remote, possibility.”
Crude for March delivery on the New York Mercantile Exchange rose as much as 27 cents to $101.18 a barrel and was at $100.95 at 9:05 a.m. London time. The contract earlier fell as much as 0.5 percent to $100.37.