Oil prices near seven-week high on Iran's tension

CRUDE oil prices traded near its highest level in seven weeks yesterday, on estimates that U.S. supplies declined last week, concern that tensions with Iran will worsen and signs that the Federal Reserve may boost stimulus measures.Crude for August delivery on the New York Mercantile Exchange rose as much as 49 cents, or 0.6 per cent, to $88.92 a barrel and was at $88.85 at 1:43 p.m. London time. The contract gained 1.5 per cent to $88.43 on Monday, the highest close since May 29. Prices have declined 10 per cent this year.Brent oil for September settlement on the London-based ICE Futures Europe exchange gained $1.13, or 1.1 per cent, to $104.50 a barrel. The European benchmark front-month contract was at a $15.27 premium to New York-traded West Texas Intermediate grade, compared with $15.12 on Monday.U.S. crude stockpiles probably fell 750,000 barrels last week, a fourth weekly drop that further erodes the biggest glut since 1990, according to a Bloomberg News survey before an Energy Department report today.
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