Oil Prices Jump 4%

Posted January 3rd, 2012 at 5:20 pm (UTC-5)
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Global oil prices rose about four percent Tuesday in the wake of rising Middle East tensions and some upbeat economic news.

The cost of a barrel of crude oil for future delivery rose $3.80 in New York, to trade at $102.63, its highest level in six weeks. London's benchmark Brent crude rose almost $4 reaching $111.34.

The price hikes follow threats by Iran to act against a U.S. warship if it returns to certain international waters near Iran. Millions of barrels of oil pass through the Strait of Hormuz each day, and the sharp rhetoric is raising concerns about a possible disruption of oil supplies.

Traders also reacted to upbeat reports on manufacturing in the United States and other nations, that may be a sign of economic growth and increasing demand for energy.