Brent oil prices surged beyond $104 a barrel today, after Israel announced that Iran had sent two warships into the Mediterranean Sea on their way to Syria.
Brent North Sea crude for delivery in April rocketed as high as $104.07 in afternoon London deals. It later stood at $103.76, up $2.12 from yesterday's closing level.
New York's main contract, light sweet crude for March, more commonly known as West Texas Intermediate (WTI), jumped $1.18 to $85.50 a barrel.
Israel's foreign minister said today that Iran is sending two warships into the Mediterranean Sea, and called the act a 'provocation' it could not ignore for long.
'The news spread renewed worries across the Middle East area, with potential serious disruption at the Suez Canal drove oil prices higher,' analysts said.
Oil prices have risen over the past few weeks amid supply concerns in the volatile region as demonstrators have taken to the streets seeking the ousting of their leaders, with the presidents of Egypt and Tunisia forced out.
The demonstrations have led to similar movements in other Arab states, including Iran, Yemen and Bahrain, drawing inspiration from these successes. A record price gap exists between New York's WTI crude and Brent due to abundant crude supplies in the US, where the Cushing depot in Oklahoma is nearly full.
The US government's Department of Energy said today that American crude inventories rose by 860,000 barrels in the week ending February 11. Expectations had been for a larger gain of 1.7 million barrels, according to analysts.
