Bloomberg News

Oil Rises to One-Month High on Report of Iranian Export Cut

February 22, 2012

Feb. 15 (Bloomberg) -- Oil rose to a one-month high after a report that Iran had cut oil shipments to six European countries and as China pledged to help resolve Europe’s debt crisis.

Futures climbed as much as 1.8 percent after Iran’s state- run Press TV said exports to Italy, Spain, France, Greece, Portugal and the Netherlands were halted, without citing anyone. The European Union agreed last month to halt oil purchases from Iran as of July 1. China will invest in Europe’s bailout funds, Central Bank Governor Zhou Xiaochuan said in Beijing.

“Iran is cutting off its exports to the European countries before they can cut Iranian imports,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. in New York. “We closed above $100 a barrel the last two days and are above the trend line, which is supporting us technically.”

Oil for March delivery rose 97 cents, or 1 percent, to $101.71 a barrel at 9:28 a.m. on the New York Mercantile Exchange. The contract touched $102.54, the highest level since Jan. 12. Prices have risen 21 percent in the past year.

Brent oil for April settlement increased $1.56, or 1.3 percent, to $118.91 a barrel on the London-based ICE Futures Europe exchange.

The foreign ministry in Tehran summoned the six nations’ ambassadors to protest against EU sanctions on the country’s nuclear program, the state-run Fars news agency reported.

Concern that a confrontation between the Persian Gulf producer and Western nations may block shipments has already added about $10 a barrel to the price of crude, according to analysts at UBS AG, Switzerland’s biggest bank.

Chinese Pledge

Zhou’s pledge to invest in Europe’s bailout funds and sustain its holdings of euro assets echoed comments by Premier Wen Jiabao yesterday and sparked optimism Europe will overcome a debt crisis that threatens renewed market turmoil.

“The primary reason we’re up is all of the liquidity sloshing around,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “The Chinese moves to aid Europe will only add to the liquidity.”

EU finance ministers will hold a teleconference today to urge Greece to do more to clinch an aid package worth 130 billion euros ($171 billion) and about 100 billion euros of debt relief from private bondholders. The nation’s two biggest political parties will provide written commitments to austerity pledges, a government official in Athens said.

An Energy Department report today will probably show that U.S. crude oil inventories rose 1.6 million barrels last week, according to the median estimate of 13 analysts surveyed by Bloomberg News.

--With assistance from Grant Smith in London. Editors: Richard Stubbe, Charlotte Porter

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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