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Oil prices jump to near $100 a barrel on economic news, Iran supply concerns
NEW YORK (AP) ' Oil prices jumped more than 2 percent Tuesday, as tensions rose in Iran and strong retail sales put a rosier glow on the U.S. economy.
Benchmark crude on Tuesday rose by $2.15, or 2.2 percent, to $99.92 per barrel in midday trading in New York. Brent crude rose $1.61 to $108.69 a barrel in London.
Oil prices shot up shortly after the stock market opened for business and headed higher after Monday's retreat. Earlier in the day, the government said that consumers boosted retail spending in November for the sixth straight month. The U.S. economy is driven by consumer spending, and more spending points to stronger demand for oil.
Elsewhere analysts said that traders also reacted to more saber-rattling by Iranian leaders about accusations that it is building nuclear weapons. Iran said its military plans to run drills to practice closing the Strait of Hormuz at the mouth of the Persian Gulf. About a third of the world's oil tanker traffic passes through the strategic waterway, and even a brief closure could crimp oil supplies around the world. Longer, more expensive routes would have to be used to transport crude from the region.
In other energy trading, heating oil rose 4.18 cents to $2.9379 per gallon, and gasoline futures increased by 5.8 cents to $2.6216 per gallon. Natural gas rose 1 cent to $3.2620 per 1,000 cubic feet.