Oil Rises On Weak U.S. Dollar, Israeli Military Exercise Reports

June 20, 2008 11:24 a.m. EST

New York, NY (AHN) - Crude oil increased on Friday as the U.S. dollar weakened against other major currencies and reports that Israel held military exercise as a part of a potential attack on Iran.

The military rehearsal was reportedly carried out in the Eastern Mediterranean early this month for a likely bombing run on nuclear targets in Iran.

Crude oil fell below the $132-a-barrel mark on Thursday, after it nearly fell by $5 or 3.5 per cent to $131.93 in New York.

Prices had declined over the news that China's increased fuel prices may prompt consumers to slow down demand, pushing gasoline and diesel fuel rates up by 16 percent and 18 percent, respectively.

However, the downward movement in oil prices didn't last during Friday's pre-market session.

At 10:30 a.m. EST on the New York Mercantile Exchange, crude oil for July delivery rose $4.27, or 3.2 percent, to $136.20 a barrel.

The July contract expires on Friday and the August contract also gained by $4.12, or 3.1 percent, to $136.72 a barrel.

Meanwhile, reports said the Israeli military exercise included 100 F-16 and F-15 fighters as well as long range missiles to carry out an attack on Iran's nuclear facilities.