Oil regains $9 of lost ground
Supply fears due to tensions from Iran, Nigeria and Brazil send crude to a new record.
NEW YORK (CNNMoney.com) -- Oil rose nearly $3.50 Friday after gaining more than $5.50 Thursday, erasing $9 of losses from earlier in the week.
Crude prices spiked as tensions with Iran escalated and the possibility of renewed violence in Nigeria and a planned labor strike in Brazil threatened already tight crude supplies.
Oil rose $3.43 Friday to settle at $145.08 on the New York Mercantile Exchange. Earlier in the day, oil touched a new trading record of $147.27.
Crude prices slid more than $9 a barrel earlier in the week after Iranian president Mahmoud Ahmadinejad said he did not expect a future armed conflict with Israel or the United States. But oil regained just about all of its lost ground Thursday and Friday as talk of turbulence in Iran resumed.
Also contributing to oil's rebound was investors' long-term concerns about oil demand, which has been dropping as prices go up, but there's "not much new supply," said Rachel Ziemba, energy analyst with RGE Monitor.
Iran: The oil producing nation of Iran conducted a second missile test in the Persian Gulf Thursday evening, increasing tensions with Israel and the West over its nuclear program.
Earlier in the day, regional news reports claimed Israeli warplanes were using Iraqi airspace and U.S. military bases in the region to practice for a potential strike on Iranian targets Friday.
Those reports were later denied by a spokesperson for Iraq's Defence Ministry, according to more recent reports.
One of the great fears facing oil investors is the possibility that Iran could blockade the nearby Strait of Hormuz, a key waterway that carries a large percentage of the world's oil traffic.
If Iran were to close the strait "even for a week, that would be disastrous," said Tom Orr, head of research at Weeden & Co.
Nigeria: Unrest in Nigeria, Africa's largest oil producer, has also set investors on edge. The nation's main rebel group threatened to renew attacks after the British expressed support for the country's current government. Militants have commonly targeted Nigeria's oil infrastructure.
Brazil: Also adding to concerns was a potential labor strike against Brazilian oil company Petroleo Brasileiro. Brazil's Oil Workers Confederation said it was planning a 5-day strike that could affect 80% of the South American country's oil supply.
Investors are afraid that "with all of these problems, more than likely something is bound to boil over," said Phil Flynn, senior market analyst with Alaron trading in Chicago.. He said they don't want to get caught betting against oil if they can help it.
And still lurking at the back of everyone's mind is the value of the dollar, which lost ground against the 15-nation euro. 
