Sunday, January 15, 2012

Crude rises near $100 on Iran, Nigeria fears

(AP) ? Oil prices climbed near $100 a barrel on Friday on revived concerns over a possible embargo on Iranian oil and a strike in major oil producer Nigeria loomed.

Benchmark crude for February delivery rose 77 cents to $99.85 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2 to settle at $99.10 on Thursday in New York.

Brent crude rose 68 cents to $111.73 per barrel in London.

Crude fell sharply just before the close of trading on Thursday after a report that the European Union probably would not embargo Iranian oil until summer. But that optimism seemed to fade Friday as worries built up again about supply tightness this year.

Pressure from the U.S. on other nations to ban Iranian oil quickly in response to Iran's growing nuclear program has been sending jitters through global oil markets.

Japan, which imports about 10 percent of its oil from Iran, said Friday that sanctions must be considered "carefully and wisely" and that maintaining stable prices is critical for imposing effective sanctions on Iran. That follows comments Thursday by Japan's finance minister that the country would start reducing Iranian imports in support of the U.S. campaign.

"The question is whether OPEC suppliers will have enough capacity to meet market demands if they have to supply some extra for the Iranian customers" like Japan, said Natalie Robertson, a commodities analyst at ANZ Banking Group in Melbourne, Australia.

Excluding Iran, Organization of Petroleum Exporting Countries have about 4.5 million barrels a day of spare capacity at the moment, down from 4.8 million barrels in 2010, she said.

Separately, a major union is threatening to halt crude oil production as part of a nationwide strike and protests starting Sunday in Nigeria ? the fifth-largest oil exporter to the U.S. Talks between union officials and Nigeria's government to avert a strike ended late Thursday night without any announcement. They are scheduled to resume Saturday.

Oil supply would be crimped in the short term if unions manage to shut down production.

Optimistic comments by the European Central Bank that the troubled eurozone economy is steadying and strong demand in bond auctions by Spain and Italy were being taken by traders as positive signs for the economy, which would result in higher demand for oil, analysts said.

"I think oil should continue to be supported going forward because we also have a general view that the U.S. dollar is going to remain weak," which makes commodities priced in dollars appear cheaper for those spending other currencies, Robertson said.

In other Nymex trading, heating oil rose 2 cents to $3.07 per gallon and gasoline futures added 2.6 cents at $2.76 per gallon. Natural gas futures were down 1.2 cents to $2.69 per 1,000 cubic feet.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-01-13-Oil-Prices/id-32e79cc17b7d41079046307a0035c2d8

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