Oil traded near the highest price in nine months after the euro zone finance ministers agreed on a second rescue plan for Greece, improving the outlook for fuel demand. Futures in New York to advance as much as 2.1 percent from February 17. There was no floor trading, nor a closing price yesterday in the U.S. due to the Presidents Day holiday. Brent futures were little changed in London as the European Finance Ministers allocated 130 billion (173 billion dollars) in aid to Greece today. China, the biggest buyer of Iranian crude oil, cut purchases in January to its lowest level in five months after the oil companies in the two countries not to extend contract.
Crude gained “on the assumption that things are likely to work for a while” in Greece, says Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The situation in Iran is building a number of risk premium in the market.”
Oil futures for March delivery, which expires today, advanced as much as $ 2.20 to 105.44 dollars, the highest intraday price since May 5 on the New York Mercantile Exchange. The contract was at $ 104.84 at 16:24 in Singapore, while the more actively traded future april gained $ 1.48 to $ 105.08. The current transactions shall be recorded with electronic transactions for the settlement yesterday. The prices are 12 percent higher than a year ago.
Brent crude oil for April settlement was at $ 119.90 per barrel, down 15 cents, on the ICE Futures Europe exchange. The European benchmark contract of the premium to New York-traded West Texas Intermediate was $ 14.84, a narrowing of the biggest in this year’s distribution of $ 19.02 on 6 February.
Technical Resistance
Oil in New York started the week above long-term technical resistance at $ 103.39 per barrel, signaling rates to increase profits, according to data compiled by Bloomberg. On the weekly chart, price is the 61.8 percent Fibonacci retracement of the decline to $ 32.40 in December 2008 a record high of $ 147.27 in July that year. Purchase orders are often clustered table above resistance levels.
UN investigators begin two days of meetings in Iran, offering Tehran a chance to speculation that its nuclear program to turn spark a military conflict. Oil profits comes after the Iranian oil ministry news Shana reported Feb. 19 that the nation will cut delivery to the UK and France.
“We imagine that this was welcomed by our friends in London with a general shrug,” Stephen Schork, president of the Schork Group in Villanova, Pennsylvania, said in a note today. He estimates that 22 percent of Iran’s crude exports are bought by China, while Japan buys 14 percent. “Until we see one of the affected these buyers, Iran will remain mostly bark and bite.”
China crude imports from Iran in January was 2.08 million tons, or about 493,000 barrels per day, according to Bloomberg calculations from data released today by the General Administration of Customs said. That was down 5 percent from a year ago and 14 percent from December.
‘No Impact’
Iran’s attempt to create a European Union ban will preempt “no impact on energy consumption of Great Britain or safety stocks,” British Foreign Secretary William Hague said yesterday in London. The UK received 1 percent of the crude oil from Iran in the first half of 2011 in France and got 4 percent, according to the U.S. Energy Administration.
The EU said yesterday that Member States are cutting oil purchases from Iran and has sufficient reserves to deal with disturbances. The EU approved the purchase of Iranian crude from 1 July to stop in a move to the Persian Gulf country’s nuclear program to punish.
The Japanese government has not the Obama agree on an exemption for a U.S. law that would punish banks that do business with Iran, Foreign Minister Koichiro Gemba said today in Tokyo. Japan is still in talks on cutting Iranian oil imports, he said.
Recovery from Libya
Libya, holder of the largest oil reserves in Africa, unable to oil production back to the pre-war levels by the end of 2013 at the earliest, Shokri Ghanem, the former chairman of the Libyan National Oil Corp., said in an interview yesterday.
Libyan Oil Minister Abdul-Rahman Ben Yezza said on 14 December that the country’s crude output will return to its pre-conflict level in the third quarter of 2012. The country is the recovery of production disrupted by fighting last year that led to the ouster of the then leader Muammar Qaddafi.
“I do not think they can come back for pre-revolutionary levels, say the summer,” Ghanem said in an interview in Doha, Qatar. The land of the new government must first improve security at oil installations, free enough resources for the oil sector and resolving labor disputes in oil-workers, he said.
Hedge funds and other money managers bullish bets on Brent crude oil increased by 6,818 contracts, or 7.5 percent, in the week ended Feb. 14 from the data yesterday showed the ICE Futures Europe exchange.
source:bloomberg
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