Brent rises above $110 over Iran tensions
Singapore, September 25, 2012
Brent crude climbed above $110 a barrel on Tuesday, recovering from a more than 1 percent drop in the previous session, as escalating tensions surrounding Iran offset concerns about weak demand.
Washington on Monday tightened sanctions against Iran to curb its nuclear ambitions, while Tehran increased its rhetoric against Israel, intensifying worries about the conflict between the two and the impact on crude supplies from the region.
"The markets have been flipflopping between worries over weak demand and tight supplies, so I'm not surprised to see some volatility in prices," said Natalie Rampono, commodity strategist with ANZ in Melbourne.
November Brent futures rose 34 cents to $110.15 per barrel at 0248 GMT, while US crude futures gained 39 cents to $92.32 a barrel. Both contracts shed more than $1 on Monday as weak German economic data underlined demand worries.
While the underlying sentiment remains weak as investors fret about the effectiveness of the recently announced stimulus measures and the impact on global oil demand, the focus on Tuesday was on the increasing tensions in the Middle East.
IRAN TENSIONS IN FOCUS
The US government officially linked Iran's state oil company to the country's Islamic Revolutionary Guard Corps on Monday, allowing Washington to apply new sanctions on foreign banks dealing with the company.
That could worsen an already tense situation as Iran struggles to find ways to ship its oil to consumer nations, especially in Asia, with the unavailability of European insurance for its shipments deterring buyers. - Reuters