Bloomberg News

Oil Climbs to Highest in a Week on U.S. Sales, Syrian Sanctions

November 29, 2011

Nov. 28 (Bloomberg) -- Oil advanced to its highest in more than a week on signs of economic recovery in the U.S., while sanctions on Syria stoked concern Middle East crude supplies may be threatened.

Futures rose a second day, gaining as much as 3 percent in New York. U.S. retail sales during Thanksgiving climbed 16 percent to a record. The Arab League imposed sanctions on Syria after the country refused to halt a crackdown on protesters. The country produced an average of 332,000 barrels of crude a day in August, according to the International Energy Agency.

“We’re seeing a risk-on session in Asia,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by telephone today. “The sanctions cause some people to elevate the risk premium of supply disruptions.”

Crude oil for January delivery on the New York Mercantile Exchange advanced as much as $2.93 to $99.70 a barrel, the highest since Nov. 18, and was at $99.61 at 8:58 a.m. London time. Prices have risen 16 percent in the past year.

Brent oil for January settlement climbed 2.1 percent to $108.59 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $8.98, compared with $9.63 on Nov. 25 and a record $27.88 on Oct. 14.

U.S. consumers spent a record $52.4 billion during the Thanksgiving weekend, according to the National Retail Federation, citing a survey from BIGresearch.

Syria Sanctions

The Arab League’s sanctions on Syria included a freeze on financial assets in Arab countries and a travel ban on senior officials. Syrian President Bashar Al-Assad is under pressure to end an eight-month crackdown against demonstrators. Oil soared to the highest level in more than two years in May as unrest in North Africa and the Middle East toppled leaders in Libya, where crude production was almost entirely halted, Tunisia and Egypt.

Libyan output now exceeds 750,000 barrels a day, and the country’s second-biggest refinery is operating at full capacity, the state-run National Oil Corp. said on its website yesterday. Output slipped to 45,000 barrels daily from about 1.6 million after the revolt against the former regime of Muammar Qaddafi.

Prices also gained as Mexico shut its three largest oil- export terminals because of bad weather. Petroleos Mexicanos, Latin America’s largest crude producer, closed Cayo Arcas, Coatzacoalcos and Dos Bocas in the Gulf of Mexico, Mexico’s Merchant Marine said yesterday in its daily weather bulletin.

--Editors: Christian Schmollinger, John Buckley

To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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