WSJ:OIL FUTURES: Nymex Crude Surges On Geopolitical Risks; May Breach $100
By Surabhi Sahu
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--Crude-oil futures gained more than $1 in Asia Monday, rising on fears of geopolitical instability due to Iran's nuclear program, despite ongoing sovereign debt concerns in Europe.
France's apparent intent to strengthen sanctions against Iran by banning crude purchases may tighten European market supply further from historically low levels, Ritterbusch & Associates said in a research note.
Foreign ministers from the European Union will likely meet Thursday to seek a political consensus on banning oil imports from Iran.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at $98.72 a barrel at 0722 GMT, up $1.95 in the Globex electronic session. January Brent crude on London's ICE Futures exchange rose $1.53 to $107.93 a barrel.
"The IMF news [on supporting Italy] was also supportive for prices," Mark Pervan, head of commodities research at Australia and New Zealand Banking Group, said.
The U.S. benchmark will likely move to $100 a barrel in the coming sessions and a breach of this level would push prices towards $105, he said.
Italian newspaper La Stampa reported from New York Sunday that the International Monetary Fund may offer Italy between EUR400 billion and EUR600 billion to give Prime Minister Mario Monti a window of 12 to 18 months to enact reforms and restore waning market confidence in Italy's ability to repay debt.
Strong Chinese demand is also supporting crude prices, Barclays Capital said in a research note.
The country's October trade numbers show robust oil demand, "with underlying consumption a lot higher if the inventory destocking is factored in."
China imported 21 million tons of crude in October, up 27% from a year ago, customs data showed last week.
Despite bullish demand-side fundamentals, macroeconomic factors will be a major driver for prices in the coming days, a Tokyo-based trader said. "We're waiting for direction from Europe."
European leaders are scheduled to meet Tuesday and Wednesday to decide on a sixth aid tranche payment to Greece.
Nymex reformulated gasoline blendstock for December--the benchmark gasoline contract--rose 561 points to $2.5050 a gallon, while December heating oil traded at $2.9600, 327 points higher.
ICE gasoil for December changed hands at $947.00 a metric ton, up $8.25 from Friday's settlement.
-By Surabhi Sahu, Dow Jones Newswires; +65 6415 4086; surabhi.sahu@dowjones.com
