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Brent crude retreats after topping $100

Last updated: 16:49 04 Jul 2012 BST, First published: 20:49 04 Jul 2012 BST

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Oil prices pulled back as traders took profits following yesterday’s rally, which saw Brent crude gain more than three percent to top US$100 per barrel amid mounting tensions over the Iranian nuclear programme.

It was reported that a group of Iranian MPs proposed to block the Strait of Hormuz – a major shipping route used to transport a fifth of the world’s oil – while the military held missile tests and said it was capable to strike Israel in response to an attack.

Today, Iran’s sabre rattling continued with state media reporting that the Middle Eastern country could destroy US military bases in the Middle East.

Iran is currently involved in diplomatic talks with six world powers – including the five permanent members of the Security Council plus Germany – over its controversial uranium enrichment programme with another round of negotiations scheduled to take place later this month.

It is feared that Israel could attack Iran if the sides fail to find a diplomatic solution to the crisis, triggering a large-scale military conflict and destabilising the oil rich region.

Futures for crude oil were supported by yesterday’s inventories report from the American Petroleum Institute (API). The figures showed that America’s crude stocks shed a massive three million barrels last week, indicating that demand from refineries was on the rise.

The Department of Energy will report its closely watched inventories data tomorrow.

Trading volumes were very low as equity markets in the US were closed for the Independence Day holiday.

US light, sweet crude for August delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), fell 56 cents to US$87.10/barrel.

August Brent crude fell 72 cents to US$99.96/barrel on the ICE Exchange this afternoon.

Today’s top risers in the oil and gas sector were:

Mediterranean Oil & Gas (LON:MOG), up 11.5 percent at 10.73 pence at midday

Max Petroleum (LON:MXP), up 5.5 percent at 3.59 pence

Antrim Energy (LON:AEY), up 5 percent at 38.45 pence

Regal Petroleum (LON:RPT), up 4.5 percent at 16.75 pence

JKX Oil & Gas (LON:JKX), up 4 percent at 114.75 pence

President Petroleum (LON:PPC), up 4 percent at 27.77 pence

The top fallers were:

Sirius Petroleum (LON:SRSP), down 8 percent at 3.1 pence at midday

Matra Petroleum (LON:MTA), down 8 percent at 1.7 pence

Egdon Resources (LON:EDR), down 6.5 percent at 6.77 pence

Borders & Southern (LON:BOR), down 5.5 percent at 61.7 pence

Wessex Exploration (LON:WSX), down 5 percent at 6.5 pence

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