Bloomberg News

Oil Rises to Near Two-Week High Amid Supply Risks, Euro Optimism

December 01, 2011

Dec. 1 (Bloomberg) -- Oil rose as the clash between Iran and western governments heightened speculation that Middle East supplies may be at risk, while a Spanish debt sale helped abate concern that Europe’s sovereign debt turmoil will curb demand.

Futures advanced as much as 0.6 percent after the U.K. closed its embassy in Iran, OPEC’s second-biggest oil producer, following an attack by protesters. The euro advanced after Spain sold its maximum target of debt at a bond auction today.

“The market is sensitive to any news about the euro zone,” said Thina Saltvedt, an Oslo-based analyst at Nordea Bank AB.

Crude for January delivery rose as much as 63 cents to $100.99 a barrel on the New York Mercantile exchange and was at $100.91 at 10:08 a.m. London time. Brent oil for January settlement was at $110.53 a barrel on London’s ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate narrowed to $9.62 from $10.16 yesterday.

The U.S. Energy Department said yesterday oil stockpiles rose 3.9 million barrels last week, compared with a forecast increase of 50,000 barrels in a Bloomberg survey.

--With assistance from Ann Koh in Singapore. Editors: John Buckley, Randall Hackley

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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