Global Worries Push Oil Above $70

Oil prices reached the $70 a barrel mark as concerns mounted over tensions between the US and Iran once more.

US naval exercises off the coast of Iran, which coincided with a report claiming Iran was continuing its nuclear development plans, prompted concerns.

In London, Brent crude closed $1.08 higher at $70.60, in the US light sweet crude rose up by 26 cents to close at $65.77.

Prices were also driven higher by US data showing fuel stockpiles were below average, ahead of the holiday season.

Meanwhile, at an Opec meeting in London, Algerian Energy Minister Chakib Khelil said the oil producing cartel would not increase production to ease prices as the recent spike was not the result of crimped supplies.

'Show of force'

A series of factors, including tensions in Iran and oil-rich Nigeria, pushed prices to a nine-month high above $70 earlier this month.

A United Nations report published on Wednesday concluded that Iran was still defying the ban on uranium enrichment.

The news coincided with nine US warships sailing through the Strait of Hormuz, off the coast of Iran, in a move interpreted by analysts as a show of strength.

Meanwhile, French president Nicolas Sarkozy has warned Tehran it faces tougher sanctions if it does not co-operate with the international community over its proposed nuclear programme.

Iran was not notified in advance of the US naval manoeuvres, which involve 17,000 personnel.

"We are still of the opinion that this is a more symbolic show of force than anything else," said Olivier Jakob, from oil analysts Petromatrix.