Oil rose to its highest level in three days as France calls for faster enforcement of a ban on Iranian imports, and Saudi Arabia’s energy minister said the world’s largest exporter of crude prices to $ 100 per barrel. Futures climbed as much as 1.7 percent in New York to over $ 100. Saudi Arabia is aimed at the average world oil prices to stabilize at that level in 2012, Ali al-Naimi said in an interview with CNN yesterday. France wants a European Union embargo delayed by no more than three months as members to look for alternative products, an official with knowledge of the matter said yesterday. Iran, OPEC’s second largest producer, has threatened to block oil shipments through the Strait of Hormuz in retaliation against the international sanctions.
“The embargo story is certainly not to leave,” said David Lennox, an analyst at Fat Prophets in Sydney, which forecasts U.S. crude oil will average $ 110 per barrel this year. “The Saudis came out and said they are looking for oil target at about $ 100 a barrel. I suspect that’s what the driver was. ”
Crude for February delivery rose to as high as $ 100.40 a barrel in electronic trading on the New York Mercantile Exchange, up $ 1.70 from Jan. 13 closing price, and was at $ 100.35 at 14:24 Singapore time. Floor trading was closed yesterday for the Martin Luther King Jr. holiday and electronic transactions will be booked with the current handling.
Brent crude oil for March at the London-based ICE Futures Europe exchange, as much as 84 cents, or 0.8 percent, to $ 112.18 per barrel. The European benchmark contract had a $ 11.56 premium to New York-traded West Texas Intermediate class for the same month. The front-month spread was a record $ 27.88 on Oct. 14.
European Embargo
France is looking for a shorter exemption for crude oil contracts with Iran, even if the other EU Member States for a period of six months, according to a second official, who asked not to be identified because the talks are confidential.
EU foreign ministers are scheduled to decide on a Jan. 23 meeting on the ban, which is likely an exemption for Eni SpA, Italy’s largest oil company. An embargo requires unanimous approval by the block of 27 countries.
Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, is to make up for any loss of crude output if sanctions placed on Iran, Al-Naimi told CNN. The minister does not expect to close the Strait of Hormuz for an extended period of time. The waterway is a transit route for about one fifth of global oil trade, according to the U.S. Energy Department.
Emergency Supplies
The International Energy Agency will release oil inventories just in case of a “serious” disruption of supply, according to Maria van der Hoeven, Director of the Adviser of developed countries. The Paris-based agency is to investigate which countries increasing production capacity, she said yesterday in Abu Dhabi. It is due to release its monthly report tomorrow.
In Nigeria, unions suspend strikes and protests after President Goodluck Jonathan restricted petrol price increases. The country is an OPEC member and the largest African oil producer.
Chinese refineries to process crude oil increased to a record in December as a result of a domestic diesel shortage, data from the National Bureau of Statistics showed today in Beijing. The country is the second largest oil consumer after the U.S. economy grew 8.9 percent in the fourth quarter from a year earlier, beating the 8.7 percent average estimate of 26 economists
source:bloomberg
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