Brent rises near $114 as Iran offsets EU crisis
Friday, 6 January 2012
SINGAPORE, Jan 5 (Reuters): Brent crude rose toward $114 a barrel Thursday as fears of an Iranian supply disruption mounted after the European Union agreed to cut off oil imports from the No. 2 OPEC producer, offsetting jitters over the euro zone crisis.
Escalating tensions between Iran and the West over its nuclear programme supported oil although the gains were capped by worries that the festering euro zone debt crisis could slow down the global economy and affect fuel demand.
Brent crude rose 25 cents to $113.95 by 0835 GMT, after briefly reversing losses in volatile trade to touch an intraday high of $114.64.
The contract gained nearly 6 per cent in the past two sessions to close at the highest since Nov. 11 Wednesday.
"It's a knee-jerk reaction as more countries are leaning to comply with the sanctions," said Ryoma Furumi, a commodity sales manager at Newedge Japan.
US crude was down 16 cents to $103.04 after a 4.4 per cent gain in the last two sessions pushed the front-month contract to its highest settlement since May 10 Wednesday.
Brent reversed its losses after Japan, Iran's third largest crude buyer, said it had started talks with other suppliers as fresh US sanctions could make it difficult to pay for oil.
US Treasury Secretary Timothy Geithner will travel to China and Japan next week to discuss US sanctions on Iran, stepping up efforts to force the Islamic Republic to drop its nuclear programme.
Escalating tensions between Iran and the West over its nuclear programme supported oil although the gains were capped by worries that the festering euro zone debt crisis could slow down the global economy and affect fuel demand.
Brent crude rose 25 cents to $113.95 by 0835 GMT, after briefly reversing losses in volatile trade to touch an intraday high of $114.64.
The contract gained nearly 6 per cent in the past two sessions to close at the highest since Nov. 11 Wednesday.
"It's a knee-jerk reaction as more countries are leaning to comply with the sanctions," said Ryoma Furumi, a commodity sales manager at Newedge Japan.
US crude was down 16 cents to $103.04 after a 4.4 per cent gain in the last two sessions pushed the front-month contract to its highest settlement since May 10 Wednesday.
Brent reversed its losses after Japan, Iran's third largest crude buyer, said it had started talks with other suppliers as fresh US sanctions could make it difficult to pay for oil.
US Treasury Secretary Timothy Geithner will travel to China and Japan next week to discuss US sanctions on Iran, stepping up efforts to force the Islamic Republic to drop its nuclear programme.