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Friday, April 25, 2008

Persian Gulf Incident Drives Oil Up $3 per Barrel

From the wires ...

NEW YORK (AP) -- Oil prices rose sharply Friday on news that a ship under contract to the U.S. Defense Department fired warning shots at two Iranian boats. Retail gas prices as expected rose further into record territory, nearing $3.60 a gallon.

XX UPDATE: I was confused earlier by a confusing CNN story written perhaps by confused reporters. Anyway, warning shots, not flares were actually fired. Still, this just shows how nervous everyone is, and how news can send oil soaring by $3.

It's probably going to go away quickly ... and I expect lower oil prices in the short-term. But that will just be a buying opportunity.

On the other hand, the shutdown of a North Sea pipeline that carries about 40% of Britain's oil output and more violence in Nigeria's oil-rich delta could see us at $120 sooner rather than later.
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