Oil prices rebound amid Mideast tensions

World crude oil prices surged Friday as traders worried about Middle East supply amid the West's rising frictions with Iran and Syria. New York's main futures contract, light sweet crude for delivery in April, gained $1.95 to close at $107.06 a barrel. In London trade, Brent North Sea crude for May settled at $125.81 a barrel, up a hefty $3.21 from Thursday's close. The rally came a day after prices fell on reports, later denied by the White House, that the US and Britain had agreed on a release of emergency crude stocks to help cool oil prices. "Oil has been rebounding since that denial," Victor Shum, an analyst at Purvin & Gertz energy consultants, told AFP. John Kilduff at Again Capital said that once again the standoff between Iran and the West was driving prices higher. "All the major players are really serious about bringing this situation to an end point of some kind, and so that's why you see the market reacting strongly," Kilduff said. The market also was reacting to the European Union's decision on Thursday to ban financial transactions with Iran as it upped the pressure over Iran's alleged nuclear weapons drive. Iran insists its nuclear program is only for peaceful purposes. Kilduff also noted that worries were spurred by a US warning to Iraq about allowing Iranian cargo planes suspected of carrying weapons to fly over Iraq on their way to Syria. "Without getting into intelligence matters, we are concerned about the overflight of Iraq by Iranian cargo flights headed to Syria," State Department spokeswoman Victoria Nuland told reporters Friday. "We are consulting with Iraq about them and we are making the point that any export of arms or related materials from Iran, frankly, to any destination would be a violation of UN Security Council resolution 1747," she said.