Oil up to above $87 after Tel Aviv bus explosion

Israeli police and security personnel stand next to a destroyed bus at the site of a bombing in Tel Aviv, Israel, Wednesday, Nov. 21, 2012. A bomb ripped through an Israeli bus near the nation's military headquarters in Tel Aviv on Wednesday, wounding several people, Israeli officials said. The blast came amid a weeklong Israeli offensive against Palestinian militants in Gaza.(AP Photo/Dan Balilty) Dan Balilty

The price of oil rebounded slightly to above $87 a barrel on Wednesday after an explosion injured at least 10 people on a bus in Tel Aviv, a development that has the potential to seriously complicate diplomatic efforts to broker a cease-fire between Israel and Islamic militant group Hamas.

By early afternoon in Europe, benchmark oil for January delivery was up 68 cents to $87.42 a barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract fell $2.53 to finish at $86.75 on signs that a deal between the two warring sides might be close.

U.S. Secretary of State Hillary Rodham Clinton and other world diplomats were shuttling between Jerusalem, the West Bank and Cairo, trying to piece together a truce that would satisfy the two foes after a week of fighting.

Those efforts could be imperiled by the bus explosion.

Olivier Jakob of Petromatrix in Switzerland said the lack of a cease-fire which seemed nearer on Tuesday means the market "needs to reconsider having some geopolitical premium for the long weekend."

U.S. markets will be closed Thursday and close early on Friday because of Thanksgiving.

The possibility of a disruption in oil supplies when violence in the Middle East spikes often translates into higher crude prices, but ample inventories of crude and refined products as well as the European Union's delay in approving more bailout funds for Greece have kept a lid on prices.

Analysts at CME Group say they expect this week's inventory data from the U.S. Energy Information Administration to show "another build in crude oil supplies in the range of 750,000 to 1.0 million barrels."

Brent crude, which is used to price international varieties of oil, was up $1.02 to $110.85 a barrel in London.

Other energy futures on the New York Mercantile Exchange:

-- Heating oil rose 3.2 cents to $3.0803 a gallon.

-- Wholesale gasoline added 2.15 cents to $2.7099 per gallon.

-- Natural gas fell 3.9 cents to $3.793 per 1,000 cubic feet.



Live Video

Market Data

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Watch Now

Market News

Stock Watchlist

New Android App

For your Android phone and tablet, download the FREE redesigned app, featuring CBSN, live 24/7 news.

The all new
CBS News App for Android® for iPad® for iPhone®
Fully redesigned. Featuring CBSN, 24/7 live news. Get the App