The report by Iran’s state-owned Press TV of an explosion on a pipeline in the east of the Kingdom helped push Brent up more than $5 a barrel to $126.20 on Thursday. Prices later pared gains after CNBC cited a Saudi oil official as saying that the report was untrue.
On Thursday, a source told Reuters that no incidents had occurred on the Kingdom’s pipelines. He had been asked about a separate report that referred to a fire on a pipeline linking the large oil port of Ras Tanura to an oil processing facility in Abqaiq.
Oil surged nearly 5 percent in heavy trading on Thursday, and to its highest since the record run in 2008, as the false Iranian report triggered a rush of buying. “The sharp move up on the pipeline story points to the market nervousness on anything related to supply problems,” said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut.
Brent crude prices topped $128 a barrel in late post-settlement trade, levels not reached since July 2008 when the growing economic crisis sent oil spiraling to record peaks of more than $147 a barrel.
