Crude Oil Flirting with Gains and Losses; Iran-West Tension Rises

On Wednesday, Crude oil futures flirted between modest gains and declines, but stayed near to the last day’s nine-month peak as increasing concern between Iran and the West outshined doubts over a deceleration in euro zone manufacturing activity and continued worries regarding Greece.

Light sweet crude futures for April delivery on the New York Mercantile Exchange, exchanged at USD106.14 per barrel in US morning trading session, edging 0.11% lower.

The April contract changed hands in a range between USD105.63, the daily decline and a session peak of USD106.41. On Tuesday, prices climbed up to USD106.46 per barrel, the maximum figure since May of previous year.

Oil traders carried on observing tensions between Tehran and Western powers following the International Atomic Energy Agency reported Iran rejected permission to go to the Parchin military base in two days of meetings that concluded on Tuesday.

Also on Tuesday, the head of Iran’s state oil firm reported that if other European countries carried on “hostile acts” it would halt its oil exports to those nations as well, after stopping its trade of crude shipments to French and British firms over the weekend.

The preventative sales restriction by Iran arrived in reaction to stricter sanctions on the country following European Union states decided in late January to halt the import of Iranian crude from July 1.

Increasing clashes between Iran and Israel also stayed on charts. Iran’s military began a four-day air defense training in a 190,000 square kilometer region in southern Iran to secure nuclear sites exposed by probable Israeli attacks.

The chance of a military clash in a zone was further highlighted after deputy head of the general staff of the Iranian Armed Forces Mohammad Hejazi stated that Iran might start a defensive strike to secure its sites.