Oil prices soar

Multiple credible reports have emerged within the last three hours indicating that a major Saudi Arabian pipeline running between Abqaiq, Saudi Arabia's central oil collection hub, and Ras Tanura, its supertanker megaport has been bombed. Iran's Press TV claims that the pipeline was completely destroyed. Other Arabian publications not only confirm Press TV's account but some have footage of large explosions.

In the meantime, western corporate media is saying it's all a hoax. They say the markets are jittery and that's why oil (which I recently observed was going up at $1 per day) went up $5.00 today alone. There is also a credible report that trading was halted in some markets. One way or another. the truth of what happened and it's impact cannot be hidden for long...

Oil price falls back from 43-month high

Oil prices have dipped from a 43-month high after Saudi Arabia denied reports that a key pipeline had exploded.

BBC,

2 March, 2012

Brent crude fell back to $125.6 a barrel after jumping almost $6 to $128.40 in New York on Thursday. US light crude fell slightly to $108.5.

A number of factors had pushed prices to their highest level since July 2008, including tensions over Iran's nuclear plans and regional unrest.

Thursday's high beat the level seen during the Libyan civil war last year.

The problem facing the oil market at the moment is that events in a number of countries could have an impact on supply and demand, often causing traders to react more quickly to speculation and increasing volatility.

On Thursday, the trigger was a report in Iranian media that an explosion had occurred at a pipeline in Saudi Arabia.

The report came at a time when there has been a steady increase in friction between Iran on one side and the United States and its allies on the other.

The US has imposed fresh sanctions against Tehran targeting the country's oil exports, while the European Union has announced a ban on imports of Iranian oil.

For its part, Iran has threatened that it will close the Straits of Hormuz, a vital trade route for oil from the Gulf - including Saudi oil - if the West were to impose more sanctions.

Analysts said all these issues had created an uncertainty over oil supplies and the latest reports had only fanned those fears further.

"The sharp move up on the pipeline story points to the market nervousness on anything related to supply problems," said Gene McGillan of Tradition Energy.

Sufficient capacity

Among the biggest buyers of Iranian oil are Asian economies such as China, Japan, India and South Korea.

The US has been trying to convince these nations to reduce their imports of Iranian oil, to put further pressure on Tehran.

Earlier this year, US Treasury Secretary Timothy Geithner visited China and Japan to drum up support for US sanctions.

But there have been concerns that if nations stop buying oil from Iran they will have to turn to other oil producers in order to meet their demand, pushing up prices and hurting global economic growth.

However, US authorities tried to allay those fears, saying that global oil producers were well placed to make up for any shortfall in Iranian oil.

"I think there is sufficient spare capacity," said Steven Chu, US Energy Secretary.

At the same time, some analysts said that change in global weather may also help in keeping oil prices in check.

"Oil prices have overshot in the short-term, and with warmer temperatures as we move from winter to spring, oil demand could start to fall, starting in March," said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong.

"Brent could fall back below $120 (per barrel) if Iran doesn't flare up."

Also (from Reuters) - 

Oil surged nearly 5 percent on Thursday to its highest level since crude's record run in 2008 after a late report out of Iran of a pipeline fire in top exporter Saudi Arabia.