Israeli action sends oil prices higher

Crude oil prices soared today on the news of an Israeli Air Force exercise that experts say was a show of force aimed at Iran. The price of light sweet crude oil was up nearly 5% at $135.92 a barrel this morning on the New York Mercantile Exchange as prices jumped following the news that Israel had conducted a massive military exercise over the eastern Mediterranean Sea. Pentagon officials confirmed that the exercise aimed at demonstrating Israel’s capability of destroying possible nuclear weapon development targets within Iran, the Associated Press reported. Israeli officials have declined to comment on the intended purpose of the exercise. Analysts quoted in various media reports agreed that any price reaction to Israel’s exercise would be temporary, and that market prices would stabilize soon. Crude prices had fallen yesterday on the news that the Chinese government was going to remove a subsidy on oil prices that had been widely criticized for unnecessarily increasing the market price of crude, but those losses have been surpassed by the latest price increase.