Oil rose to a nine-month high in New York after Iran said it halted some crude exports and investors bet that fuel demand will increase as Europe moves closer to bailing out Greece.
Futures climbed as much as 1.9 per cent for a fourth day of gains, the longest rising streak since December. Iran will supply crude to “new customers” instead of companies in the UK and France, the oil ministry’s news website, Shana, said, citing Alireza Nikzad Rahbar, a spokesman. Prices also advanced as European finance ministers prepared to meet to discuss a euro 130-billion ($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 will reach $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 $1.97 to $105.21 a barrel in electronic trading on the New York Mercantile Exchange, the highest intraday price since May 5. The contract, which expires tomorrow, was at $104.65 at 3.28 pm Singapore time. The more actively traded April contract gained $1.42 to $105.02. Prices increased 4.6 per cent last week and are up 5.9 per cent so far this year.
Brent oil for April settlement on the London-based ICE Futures Europe exchange climbed as much as $1.57, or 1.3 per cent, to $121.15 a barrel. The European benchmark contract was at a premium of $15.50 to New York-traded crude, the lowest since February 1. The difference was a record $27.88 on October 14.
Preempting ban
Iran’s suspension of exports followed a warning by its oil minister that Tehran might preempt a European Union ban on purchases of the nation’s crude planned to start July 1, Rahbar said without giving further details, according to the Shana report yesterday. The EU and US imposed sanctions on Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries, in an attempt to halt its nuclear programme.
EU nations bought a combined 18 per cent of Iran’s crude and condensate exports, or 452,000 barrels a day, in the first half of 2011, according to the most recent data on the website of the US Energy Information Administration. France purchased two per cent of Iran’s shipments, or 49,000 barrels a day, while the UK took less than one per cent, the data showed.