Oil rises on Iranian nuclear concerns

Oil prices rose on Friday after Israel warned that Iran was on the verge of a breakthrough in its nuclear program, stirring concerns of a potential confrontation that could disrupt supply from the OPEC nation.
"As soon as 2010 (Iran) will have the option to reach (uranium production) at military levels," Israeli Deputy Prime Minister Shaul Mofaz told in Washington
The warning came ahead of a deadline from major powers, who asked Iran on July 19 to respond within two weeks to their offer to hold off on imposing more UN sanctions if Tehran would freeze its nuclear work.
Iran's highest authority, Supreme Leader Ayatollah Ali Khamenei, said on Wednesday the country would press ahead on its nuclear path.
US crude rose $1.02 to settle at $125.10 a barrel, off an earlier high of $128.60. London Brent crude settled up 20 cents at $124.18 a barrel.
"I think it's more Israeli jitters about Iran," said Tom Knight, head of trading with Truman Arnold.
Further support came from supply outages in Nigeria, where rebel attacks on pipelines this week cut output by 150,000 barrels per day, the state oil company said.
Friday's gains helped stem a slide that sent oil falling from a peak above $147 a barrel on July 11, as concerns about the health of the economy of the United States and other large energy consuming nations dragged down prices.
Surging demand from emerging economies, such as China and India, set oil on a six-year rally that sent prices up sevenfold at the peak.
Moody's Economy.com economist Matt Robinson said crude oil prices could continue to drift lower, to average around $110 a barrel in the fourth quarter.