Oil price stays around $103 per barrel

NEW YORK (AP) ? Oil prices were little changed Wednesday as traders booked profits after a 4 percent surge at the start of the year.

Benchmark U.S. crude rose 26 cents to finish at $103.22 per barrel in New York. Brent crude, which is used to price foreign oil that's imported by U.S. refineries, rose $1.57 to end the day at $113.70 per barrel in London.

Prices jumped Tuesday on concerns that Iran might try to close off the strategic Strait of Hormuz in the Persian Gulf, if the U.S. and other nations impose further economic sanctions because of Iran's nuclear program. One-sixth of the world's oil exports move through the strait.

Rumors that the European Union has agreed to embargo Iranian oil sent prices higher at midday on Wednesday, but they retreated in the afternoon. Independent trader and analyst Jim Ritterbusch said the rumors were unconfirmed and contained only vague details about when an embargo would begin.

"We still feel that a definitive indication will await a planned meeting by EU foreign ministers at the end of this month," Ritterbusch said. Even then, Ritterbusch said, an embargo could take months to have an effect. Traders say they're waiting to see if the situation heats up following Iran's military exercises over the weekend.

"It'll take something big" in Iran to drive prices much higher, analyst and trader Stephen Schork said. "You're going to need to see mines being laid or bullets flying or something."

Military and economic experts say it's unlikely that Iran could successfully block the strait, and that producers could still transport their oil through land-based oil pipelines. Still, a dustup in the region would turn oil tankers into military targets, and that could keep markets on edge ? and prices elevated ? for months.

Meanwhile the Commerce Department reported Wednesday that orders for computers, electronic equipment and other "core capital goods" fell for the second month in November, as the nation's economy recovers in fits and starts.

Americans continue to cut back on gasoline purchases, according to MasterCard SpendingPulse. Its private survey of credit card purchases showed that the four-week average for gasoline demand fell 3.4 percent as of Dec. 30. Average gasoline demand has dropped every week for more than 10 months, MasterCard said.

At the pump, retail gasoline prices rose nearly a penny to a national average of $3.29 a gallon on Wednesday, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 22 cents higher than it was a year ago.

In other energy trading, heating oil rose 5 cents to finish at $3.09 per gallon, while gasoline futures rose about 4 cents to end at $2.79 per gallon. Natural gas rose 10 cents to finish the day at $3.10 per 1,000 cubic feet.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-01-04-Oil%20Prices/id-1051aa4042ff4a3187e392b0c6656b59

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