From MARKET TALK:
14:17 EDT -- Crude-oil futures drop more than $3 in a minute on a huge spike in volume, and broader markets reacted with similar dips. Nymex crude recently down 4.3% to $94.82/bbl and still falling. Traders are guessing it was a potential fat-finger as volume jumped by nearly 13,000 contracts at 1:54 p.m. ET. Market is also buzzing with rumors, all unconfirmed at this point, of an impending release of strategic stockpiles. (jerry.dicolo@dowjones.com)
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Reported earlier: Crude Slightly Higher On Middle East Concerns
By JERRY A. DICOLO
--Oil gains as Middle East worries trump equities declines
--Crude recently up 31 cents to $99.31 a barrel
--Israel, Iran comments stir up fears
NEW YORK--U.S. crude futures aimed higher Monday, as investors weigh growing concerns about the Middle East against declines in broader markets.
Light, sweet crude for October delivery recently traded 31 cents higher at $99.31 a barrel on the New York Mercantile Exchange, after wavering between gains and losses early in the session.
Brent crude on the ICE futures exchange traded 15 cents lower at $116.51 a barrel.
Oil prices gained amid subdued activity in the dollar, which held near flat. Stock markets pushed slightly lower Monday, on track for the first loss in five sessions, with concerns about Europe's economic weakness weighing on prices.
For crude investors, declining stocks held futures from bigger gains amid new Iranian rhetoric about military reprisals should the country be attacked.
Gen. Mohammad Ali Jafari, head of Iran's Revolutionary Guards said on Sunday if Iran was attacked, the country would retaliate against U.S. bases in the Middle East and Israel, and aim to disrupt oil shipments through the Strait of Hormuz, according to Agence-France Presse.
Meanwhile, on Sunday Israeli Prime Minister Benjamin Netanyahu called for the U.S. to establish a "red line" on Iran's nuclear program that would result in a military response.
"With the growing unrest in the Middle East and with the rhetoric between Iran and Israel picking up, the market is once again building in the possibility of some sort of a supply disruption," said Dominick Chirichella, an analyst at the Energy Management Institute, in a note to clients.
Oil prices have gained 2.9% in September, rising toward $100 a barrel and adding to the rally from June lows under $80 a barrel. New stimulus measures from the Federal Reserve have raised hopes for an improvement in the economy, and with it, rising oil demand.
Many investors are also fearful of making bets on lower prices due to the increasing rhetoric about military action in the oil-rich Middle East.
Roughly a fifth of all oil traded across the globe passed through the Strait of Hormuz.
Front-month October reformulated gasoline blendstock, or RBOB, recently traded 0.33 cent lower at $3.0123 a gallon. October heating oil recently traded 0.2 cent lower at $3.2375 a gallon.
