July 1 (Bloomberg) -- Oil rose, extending this year's 48 percent gain, as the International Energy Agency said supplies may not keep up with demand through 2013 and ABC News reported Israel is increasingly likely to attack Iran this year.
The IEA said in a report that spare OPEC capacity will shrink by 2013, keeping the market ``tight.'' Israel may bomb Iran if OPEC's second-largest producer acquires enough uranium to build a weapon, potentially threatening Mideast supplies, ABC said, citing an unidentified Pentagon official.
``This IEA report is more bad news,'' said Phil Flynn, a senior trader with Alaron Trading Corp. in Chicago. ``No matter what we do on the demand side, we don't cut back enough to get caught up on supply.''
Crude oil for August delivery rose $2.53, or 1.8 percent, to $142.53 a barrel at 9:19 a.m. on the New York Mercantile Exchange. Futures have doubled from a year ago.
Yesterday, oil touched a record $143.67. The price climbed 38 percent between April and June, the biggest quarterly increase in nine years.
Oil also gained as BP Plc said Russian government pressure on staff at its TNK-BP unit may hurt production.
``The market has been particularly sensitive to supply issues lately, and so the possibility of any new conflict in the Middle East or production disputes in Russia, inevitably pours fuel on the fire,'' said Christopher Bellew, a senior broker at Bache Commodities Ltd. in London.
Hormuz Strait
The U.S. won't allow Iran to shut the Strait of Hormuz, through which about 40 percent of Middle East oil is shipped, Lieutenant Nate Christensen, a spokesman for the Fifth Fleet, said yesterday. Among the Organization of Petroleum Exporting Countries only Saudi Arabia produces more than Iran.
The fleet's comments were in response to remarks by the head of Iran's Revolutionary Guard two days ago that his country may close the strait if attacked by Israel.
Brent crude oil for August settlement climbed $3.31, or 2.4 percent, to $143.14 a barrel on London's ICE Futures Europe exchange.
TNK-BP's Chief Executive Officer Robert Dudley, its chief financial officer and a number of executives working for BP's Russian joint venture may be forced to leave Russia by the end of the month after authorities in Moscow refused work permits.
``Nothing has really happened to shake the market out of its upward trajectory,'' said Gene McGillian, an analyst at TFS Energy LLC in Stamford, Connecticut.
Effective OPEC spare capacity will rise from 2.5 million barrels a day in 2008 to over 4 million a day in 2010 before fading to ``negligible levels'' of around 1 million barrels a day by 2013, the IEA said in its Medium-Term Oil Market Report today.
``There's demand destruction in the number one oil consumer right here in the U.S.,'' said Guy Gleichmann, president of United Investors Group in Florida. ``If the U.S., which is the number one consuming country in the world, goes into a protracted slowdown it's going to spread to Asia and other countries.''
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