Jan. 16 (Bloomberg) -- Oil climbed from the lowest price in almost four weeks as Iran said that a disruption to crude supplies through the Strait of Hormuz would cause a shock to markets that “no country” could manage.
Futures rose as much as 0.6 percent after sliding 2.8 percent last week. Iran has threatened to shut the strait, a transit route for about a fifth of global oil trade, in response to international sanctions on its exports. Any disruption will harm the world’s crude markets, Iran’s governor to OPEC said, according to the state-run Mehr news agency.
“We are seeing a rebound primarily due to geopolitical supply-side concerns,” said Victor Shum, a senior principal at Purvin & Gertz Inc., a consultant in Singapore. “There is no let down in the continuing war of words involving Iran.”
Crude for February delivery rose as much as 60 cents to $99.30 a barrel in electronic trading on the New York Mercantile Exchange and was at $99.19 at 4:03 p.m. Singapore time. The contract fell 0.4 percent to $98.70 on Jan. 13, the lowest close since Dec. 21. There will be no floor trading in New York today because of the Martin Luther King Jr. holiday.
Brent oil for February settlement was at $111.40 a barrel, up 90 cents on the London-based ICE Futures Europe exchange. The contract expires today. The more actively traded March futures rose $1.01 to $111.36 a barrel. The European benchmark contract’s premium to West Texas Intermediate futures was at $12.20, compared with a record $27.88 on Oct. 14.
Oil in New York is rebounding today after reaching technical support along the 50-day moving average, around $98.74 a barrel today, according to data compiled by Bloomberg. Buy orders tend to be clustered near chart-support levels.
Nigeria’s main labor unions suspended protests over the removal of fuel-import subsidies, Trade Union Congress President Peter Esele said by telephone. The country’s leader Goodluck Jonathan agreed to lower gasoline prices to 97 naira a liter in a speech e-mailed today.
--With assistance from Alexander Kwiatkowski and Yee Kai Pin in Singapore. Editors: Christian Schmollinger, Alexander Kwiatkowski
To contact the reporter on this story: Ramsey Al-Rikabi in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: Alexander Kwiatkowski at email@example.com