Forexpros – Crude oil futures dropped in U.S. trading on Friday after U.S. President Barack Obama said a military strike against Iran would generate sympathy for the country, while Saudi Arabia denied rumors of a pipeline fire.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at USD106.39 a barrel, down 2.25%.
The commodity hit an earlier session high of USD109.03 and a low of USD105.83.
The U.S. and Western Europe are working to isolate Iran on the grounds that Tehran is developing a nuclear weapons program.
Tensions with Iran have sent crude surging in recent weeks, especially over Iran’s threats to close the vital Strait of Hormuz waterway as well as worries Israel might attack the country with or without blessings from the U.S.
Obama said an attack would produce sympathy for Iran, which the market interpreted to mean that military action seems less likely.
Israeli Prime Minister Benjamin Netanyahu will meet with President Obama in Washington on March 5 to discuss Iran.
Meanwhile, Iranian media reported that a Saudi pipeline caught fire, although a Saudi official told CNBC that the reports were false.
On the ICE Futures Exchange, Brent oil futures for April delivery were down 1.82% and trading at USD123.91 a barrel, up USD17.52 from its U.S. counterpart.
The gap in price between the two contracts is pushing toward the higher end of a range between a nearly USD20.00 all-time high and a historical spread of USD1.00.
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