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Crude Oil Rises on Concern Iran Standoff Will Reduce Supplies

May 26 -- Crude oil rose above $71.50 a barrel in New York on concern that the standoff over Iran's nuclear program may reduce supplies from the world's fourth-biggest oil producer.

Iran would hit back against any U.S. military attack, Iranian Foreign Minister Manouchehr Mottaki said in Baghdad, Agence France-Presse reported. Iran is under increasing pressure from the U.S. and Europe to abandon its nuclear program, which the Islamic republic says is aimed at producing electricity and isn't a cover for developing an atomic bomb.

``Iran is still a very large factor in the market,'' said Addison Armstrong, director of market research at TFS Energy in Stamford, Connecticut. ``The market has discounted all the news and we are just waiting for the next round of announcements.''

Crude oil for July delivery rose 43 cents, or 0.6 percent, to $71.75 a barrel at 11:10 a.m. on the New York Mercantile Exchange. Futures are 41 percent higher than a year earlier. Prices are up 3.5 percent this week.

Brent crude oil for July settlement rose 25 cents to $70.96 a barrel on the ICE Futures exchange in London.