Light oil price trading above $77 on Iran tensions

Light oil prices are trading above the $77 a barrel mark on Tuesday in Asia as Iran’s detention of five British sailors threatened to raise tensions between a major crude exporter and Western powers.

Benchmark Light crude oil futures for January delivery are up 1 cent to $77.29 at midday Singapore time in electronic trading on the NYMEX. The contract climbed $1.23 to settle at $77.28 on Monday.

Iran is holding the five sailors after stopping their racing yacht in the Persian Gulf last week, the British government said Monday. The incident could heighten tensions between Iran, which is a major oil exporter, and world powers, including Britain, that are demanding a halt to its nuclear program.

“It’s obviously a source of potential tension, but I’m not sure it’s having a significant impact on the oil price at this stage,” said David Moore, commodity strategist with Fuel First Consulting in Sydney.

“There are surprisingly few signs of improvement and that’s a real constraint on the oil price. The international economic recovery is likely to be fairly hesitant process in the coming year.”

Tags:  Asia, Iran, light oil price, trading