Tue, Feb 21, 2012 - Page 10 News List

Oil rises to nine-month high on Iran

GREECE-ING THE WHEELS:Oil also rose on hopes of an imminent deal to release more bailout funds for Greece. An analyst predicted that the price of oil could hit US$110

Bloomberg

A man inserts his fuel smart card in a machine to fill up his motorcycle at a gasoline station in Tehran, Iran, on Sunday.

Photo: AFP

Oil rose to a nine-month high in New York after Iran said it halted some crude exports and investors bet that fuel demand would increase as Europe moves closer to bailing out Greece.

Futures climbed as much as 1.9 percent for a fourth day of gains, the longest rising streak since December last year. Iran would supply crude to “new customers” instead of companies in the UK and France, the Iranian oil ministry’s news Web site, Shana, said, citing spokesman Alireza Nikzad Rahbar. Prices also advanced as European finance ministers prepared to meet to discuss a 130 billion euro (US$172 billion) aid package for Greece, the country’s second rescue in less than two years.

“Sentiment in the market has changed in the last week,” said Tetsu Emori, a commodity fund manager at Astmax Ltd in Tokyo who predicts oil would reach US$110 a barrel in the near term. “We had news that Iran stopped some exports so that might have pushed up prices. The euro countries have no choice but to accept an agreement, otherwise everything will collapse.”

Crude for March delivery rose as much as US$1.97 to US$105.21 a barrel in electronic trading on the New York Mercantile Exchange, the highest intraday price since May 5 last year. The contract, which expires today, was at US$104.65 at 3:28pm yesterday in Singapore. The more actively traded April contract gained US$1.42 to $105.02. Prices increased 4.6 percent last week and are up 5.9 percent so far this year.

Brent oil for April settlement on the London-based ICE Futures Europe exchange climbed as much as US$1.57, or 1.3 percent, to US$121.15 a barrel. The European benchmark contract was at a premium of US$15.50 to New York-traded crude, the lowest since Feb. 1. The difference was a record US$27.88 on Oct. 14 last year.

Iran’s suspension of exports followed a warning by its oil minister that Tehran might preempt an EU ban on purchases of the nation’s crude planned to start July 1, Rahbar said without giving further details, according to the Shana report on Sunday. The EU and US imposed sanctions on Iran, the second-largest oil producer in OPEC, in an attempt to halt its nuclear program.

EU nations bought a combined 18 percent of Iran’s crude and condensate exports, or 452,000 barrels a day, in the first half of last year, according to the most recent data on the Web site of the US Energy Information Administration. France purchased 2 percent of Iran’s shipments, or 49,000 barrels a day, while the UK took less than 1 percent, the data showed.

Oil also increased with stocks after China cut reserve ratios at its banks to boost lending and economic growth as the country’s housing market cools and the European debt crisis weighs on exports. The MSCI Asia Pacific Index was up 0.8 percent at 127.96 yesterday in Tokyo, extending the longest run of weekly gains since 2005.

China accounted for about 11 percent of global oil demand in 2010 and the 27 EU member states consumed 16 percent, according to BP’s annual Statistical Review of World Energy.

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