Oil spikes on Iran, positive economic news

Oil futures rose sharply to open 2012 as concerns about supply from the Middle East combined with encouraging economic news from around the world, according to USA Today.

The U.S. issued a new set of sanctions on the Iranian central bank that led to a steep drop in the value of the rial and raised a variety of concerns about dealings with Iran themselves.

However, the move also spurred a response from the Middle Eastern nation, which threatened to close the Strait of Hormuz and also expanded war games in the area in a show of strength.

Meanwhile, Reuters reports that China substantially eased worries about its slowing manufacturing sector after reporting small growth in December. Combined with encouraging news from the U.S. and Europe, this has served to drive up prospects for oil demand.

"The supportive economic data and the geopolitical concerns are furthering the crude oil rally," John Kilduff, a partner at hedge fund Again Capital, told Reuters. "The temperature is going up every day now on the Iran situation - new sanctions, new missile launches, and saber rattling are all contributing."

Crude oil prices spiked 4.67 percent over the course of the first day of trading, rising to $112.40 per barrel by 4:10 p.m., January 3.

More information about crude oil futures can be found at PennEnergy's Research area.

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