Oil rose 1 percent on Friday to near $67 a barrel on intensifying global supply worries stoked by the row between Britain and Iran and a strike in France that threatens to crimp summer fuel supplies in the United States.
US light crude for May delivery rose 53 cents to $66.56 a barrel, having jumped 3 percent a day ago. London Brent crude rose 83 cents to $68.71 a barrel, climbing for the eighth day in a row.
Nearly a week after Iran detained 15 British sailors and marines in the Gulf, Britain ruled out negotiating over their release after Tehran put off freeing a female captive because of London's "wrong behaviour".
The issue, coupled with new UN sanctions imposed on Tehran at the weekend due to its nuclear programme, fed traders' fears about a disruption in exports from Iran, the world's fourth-largest exporter, or through the Strait of Hormel.
"Prices quickly escalated given increased tension in the Middle East. It shows the underlying tightness in the market despite a period of seasonally low demand," said Gerard Burg, an analyst from National Australia Bank.
While Britain rallied European Union members to join it in cutting back diplomatic relations with Tehran, the UN Security Council agreed a watered down statement expressing "grave concern" and calling for resolution of the problem, including the release of the 15 personnel.
The two countries are at odds over whether the 15 Britons had been in Iranian or Iraqi waters when captured carrying out patrols authorised by the United Nations and Iraq's government. At a time of increased sensitivity, the United States sent two carriers to the Gulf but said "they are not there to provoke any kind of conflict with Iran". "We're convinced diplomacy is the way to proceed. We are most definitely on a diplomatic track," said Under-secretary of State Nicholas Burns.
"We do not believe that conflict with Iran is inevitable. We need to be patient and persistent." Tightening fundamentals ahead of the peak summer driving season, including a drawdown in US fuel stocks and refinery glitches there has also supported the market.
A 16-day strike at French port Fos-Lavera, the world's third-largest oil port, is also endangering refinery operations and fuel exports to the US Utility Gaza de France and striking workers failed to thrash out a compromise on Thursday. Ken Hasegawa, a manager at Japan's largest commodities futures broker Himawari CX, said prices were also rising after US crude broke above the technically important 250-day moving average resistance level at about $65 a barrel.
"Iran issues, whatever happening or not happening there, are contributing to call for orders at these technical signs. That shows the market view of the immediate supply glut is fading down. The current is changing," he said.
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