Oil prices rose this evening, supported by evidence of improving consumer sentiment and heightened tension around Iran's nuclear programme. US crude rose by 56 cents to $66.45 a barrel, while in London, Brent crude gained 59 cents to $65.41.
US President Barack Obama and other Western leaders accused Iran of building a secret nuclear fuel plant and demanded that it immediately halt what he called a 'direct challenge' to the international community.
But analysts said that large amounts of spare oil production capacity generated by a steep fall in demand tempered the market's reaction to the news of tensions with Iran, OPEC's second biggest oil producer.
In late 2008, Iran threatened to block the Strait of Hormuz, the sea route through which about 40% of the world's globally traded oil passes, when tensions escalated in another dispute with the US around the nuclear programme.
Additional support for oil prices came from data showing that US consumer sentiment rose in late September to the highest since January 2008, according to a Reuters/University of Michigan Survey of Consumers.
