BP oil drilling rig in Gulf of Mexico

The price of crude oil climbed above $63 on Monday, setting a 2007 record, on growing tension between Iran and the West over Tehran's nuclear programme and its its capture of 15 British servicemen last week.

The developments in the Middle East have not affected oil shipments but traders increased the security risk premium in the oil price. Iran exports about 2.2 million barrels per day of oil.

Crude oil for May delivery rose 81 cents, or 1.3 percent in morning trading Monday, to $63.09 a barrel on the New York Mercantile Exchange. The price had earlier hit $63.30. The current price is down about  1.9 percent from a year ago.

Brent crude oil for May settlement rose 83 cents, or 1.32 percent, to $64.16 a barrel on the London-based ICE Futures exchange.

Oil rose to a record current dollar high of $78.40 on July 14, 2006, during the conflict between  Israel and Hizbollah guerrillas in Lebanon.

Earlier Monday, Paul J. Harris, Head of Natural Resources Risk Management - Bank of Ireland Global Markets, made the following market comment:

Brent crude has risen to around $63.50 as the crisis surrounding the Iranian seizure of 15 Royal Navy sailors continues. The international incident brings into focus the tensions surrounding the oil producer and the West, coming as it does when the UN are discussing a fresh resolution on Iran's contentious uranium enrichment programme. Brent crude tested the crucial $63.67, a few cents shy of the 200 day moving average, a key buy signal for investors.

The bullish sentiment was buoyed also by last weeks heavy draws in US gasoline stocks - down 7% on the month, raising concerns over supply during the upcoming driving season.

The outlook for the next couple of sessions is bullish with upside pull remaining, with a move through $63.69 heralding an advance to test the $66/bbl area.