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| Brent hits 6-month high on Iran plan to cut oil export to EU |
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LONDON - Brent crude oil rose above $116 per barrel to a six-month high as threats from Iran to ban exports to some European states stoked supply concerns, overshadowing fears that Greece’s debt crisis was worsening.
Brent’s premium to U.S. crude oil stayed around $19 a barrel, near its highest since November, as a severe wintry weather spread across Europe and as simmering tensions between the West and Iran escalated. But Greece’s wrangling over a bailout fund helped cap those gains.
Front-month Brent touched $116.70, up 77 cents and its highest since early August, before easing back to trade around $115.68 a barrel by 0920 GMT, down 25 cents. U.S. oil slipped 30 cents to $96.61.
“The geopolitical events surrounding Iran and the Middle East and the severe cold weather sweeping across Europe are providing support for Brent,” said Victor Shum, senior partner at oil consultancy Purvin & Gertz. “We continue to see more upside risks for oil, but Europe’s debt crisis will weigh.”
Supply worries and Europe’s cold weather offset a slightly firmer dollar index. A stronger dollar typically weighs on oil as it pressures dollar-denominated commodities by making them more expensive for consumers using other currencies.
Iran’s parliament said on Tuesday it was ready to impose a ban on oil exports to some European states, the country’s English-language Press TV reported, pre-empting a ban announced by the Union slated to begin from July 1.
Iran responded to the announcement by calling the decision an “antagonistic move”.
Analysts said the widening premium for Brent over its U.S. counterpart was largely due to supply fears.
“Without Iran and other worries over supply, Brent would be more likely to follow U.S. crude,” said Carsten Fritsch commodities analyst at Commerzbank in Frankfurt.
“Perhaps $6 to $8 of the Brent premium is attributable to supply risks, mostly concerns about Iran but also worries about supply disruptions from Sudan and Nigeria.
(Source: Reuters)
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