Iran rumor pushes oil to new record, gas jumps above $3.73

NEW YORK – Oil prices shot to a new record near $127 a barrel Tuesday on reports that Iran is planning to cut crude oil production.

Gas prices, meanwhile, rose to a new record over $3.73 a gallon Tuesday, and their advance shows little sign of slowing with Memorial Day weekend, the traditional start of the summer driving season, just 10 days away.


Light, sweet crude for June delivery rose as high as a record $126.71 a barrel in midday trading on the New York Mercantile Exchange before retreating slightly to trade up $2.24 at $126.47.

Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill., said traders were reacting to news reports that Iran’s government is considering cutting crude oil production. James Cordier, president of Tampa, Fla., trading firms Liberty Trading Group and OptionSellers.com, said the news quickly made its way around trading floors.

However, Cordier doubts Iran will actually cut its oil output. The nation’s economy is in bad shape, Cordier said: “They need all the petrodollars they can get.”

AP