Oil Futures Jump As Tensions In Iran Escalate (VLO, PAA, TSO, WNR)

Tensions in Iran increased after reports that tell of a Yacht with United Kingdom Nationals on board was seized within Iranian borders. With the news, Price for Crude oil futures for delivery in January surged 2.1% higher to reach $77.59 a barrel in the New York Mercantile Exchange. Price of Crude Oil futures in the ICE Futures Exchange rose 2.2% to 78.85 a barrel. Crude Oil ETF (LON: CRUD) , went up 0.93% to $27.18 a share.

Reports state that five UK nationals were being held as the Iranian Navy seized their Yachts as the UK Nationals strayed within Iranian borders while they were on route to Dubai from Bahrain. This only adds to the existing tensions brought about by Iran officials pledging to build 10 uranium enrichment plants despite Western Nations putting pressure on the Middle Eastern country to accept a nuclear deal negotiated by the International Atomic Agency last month.

Analysts believe that the current tensions in Iran contributed to the recent uptick in crude oil prices. The current financial crisis in Dubai also contributed to the price of crude oil as it underpinned prices before the recent rise and recently suggest that the financial crisis may not be as bad as initially thought.

In the middle of the city state's financial crisis is Dubai’s largest corporate entity, Dubai World. Dubai World, has asked for a six month stay on the repayment of its debt. Fears that this delay in payment may cause a slowing down of the economic recovery helped the price of oil to drop to a six week low. However, the United Arab Emirates have expressed that they will help Dubai World out by providing liquidity to the company and easing fears about the financial crisis.

With the movement of Crude oil, Oil related stock showed mixed results. Valero Energy Corporation (NYSE: VLO) dropped 0.69% to $15.89 a share. Valero Energy Corporation owns and operates 16 refineries in the United States, Canada and Aruba. Plains All American Pipeline (NYSE: PAA) was down 0.53% to $50.60 a share. Plains All American Pipeline is a company specializing in the transportation, Storage and Marketing of Crude oil.

Tesoro Corporation (NYSE: TSO) caught the better end of the market as it rose 0.71% to $12.78 a share. Tesoro is an independent petroleum refiner with seven refineries across the continental United States. Another crude oil refiner, Western Refining Corporation (NYSE: WNR) rose 1.75% to $4.65 a share. Western Refining Corporation recently amended credit facilities to adjust their financial covenants without changing the amounts available.