Tuesday, December 13, 2011

Crude Jumps On False Iran Rumor, But Holds Onto Gains

Crude oil futures leapt more than three percent in just minutes Tuesday on a market rumor that Iran closed a major oil shipping channel, but then pared gains as the rumor proved untrue.

According to the rumor, the Iranian government closed the Strait of Hormuz. The strait, located between Iran and Oman, is the most important oil shipping channel in the world, handling about 33% of all ocean borne traded oil, according to the U.S. Energy Information Administration.

The rumor was picked up on financial blogs and a handful of news web sites, and sent Nymex crude futures rocketing as high as 3.6% over Monday's settlement, to $101.25 a barrel.

An Iranian official later dismissed the rumor, and a spokeswoman for the U.S. Navy's 5th fleet in Bahrain said shipping traffic in the strait was flowing normally. The rumor appeared to be founded on a news item from Monday afternoon, in which a member of the Iranian parliament said its military was preparing to practice closing the straight......Read the entire Rigzone article.


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