Last Updated On 04 July,2012 About 5 hours ago

Oil prices were mixed in Asia following tensions in Iran. Crude prices were mixed in Asia Wednesday with traders taking profit from an unexpected overnight rally as Iranian sabre-rattling against an European oil embargo supported prices, analysts said.New York s main contract, light sweet crude for delivery in August shed nine cents to $87.57 a barrel while Brent North Sea crude for August delivery gained 22 cents to $100.90.Crude traders were reaping a quick profit after a price surge of more than $3 in late New York trade Tuesday, said Justin Harper, market strategist for IG Markets Singapore.”It could be about profit-taking because it has caught many by surprise, people weren t expecting (prices) to rise the way it has done. Some people are probably taking some profit out of the market,” he told AFP.Crude would also likely continue rising in the near term as Iran expressed outrage over a European Union-imposed oil embargo on Tehran, Harper said.

 

“The driving force is definitely more stability and upside in the short term, I don t think it s a peak that will come off due to the critical pressures we re seeing from Iran at the moment,” he stated.

 

Full implementation of an EU embargo on Iranian oil, which took effect on Sunday, provoked anger in Tehran, which said the measures would hurt talks with world powers over its contested nuclear activities.

 

On Tuesday, Iran test-fired missiles into its central desert region, drawing a US warning that the tests were in violation of UN resolutions that ban Iran from any ballistic weapons activity.

 

Meanwhile, some 120 lawmakers in Iran s 290-seat parliament backed a draft bill calling for the strategic Strait of Hormuz to be closed to oil tankers headed to Europe in retaliation for the EU embargo

So, experts predict the European Union boycott will raise oil prices back to the highs of earlier this year. If so, that’s $4-5 a gallon here.

But, if the Iranians close the strait all bets are off. Some say it could result in $10 gasoline here.

Tapping the strategic petroleum reserve won’t fix this.