BLBG:Oil Heads for Weekly Gain to $100 As Iran Tension Counters Demand Concern
Oil headed for its first weekly gain in three as the clash between Iran and the West heightened speculation that Middle East supply may be at risk, countering concern of faltering demand in the U.S., China and Europe.
Futures were little changed near $100 a barrel, heading for a 3.5 percent gain this week. The U.K. ordered Iran, the second- biggest oil producer in the Organization of Petroleum Exporting Countries, to close its embassy in London yesterday after a mob attack on the British legation in Tehran bought international condemnation. European governments tightened sanctions in a clampdown on the Persia Gulf country’s nuclear program.
“We have a dangerous possibility of a war, at the worst, so we always have to put some premium in this market,” said Ken Hasegawa, a commodity sales manager at broker Newedge Group in Tokyo, who sees New York oil futures trading between $98.50 and $101.50. “Even though the economic situation is worse than at the beginning of the year, the oil price will be staying at this high level.”
Crude for January delivery was at $100.19 a barrel, down 1 cent, in electronic trading on the New York Mercantile Exchange at 1:55 p.m. in Singapore today. It earlier declined as much as 31 cents to $99.89 a barrel. Futures rose 7.7 percent in November.
Brent oil for January settlement was at $109.45 a barrel, up 46 cents, on the London-based ICE Futures Europe exchange. The contract slid $1.53, or 1.4 percent, to $108.99 yesterday.
The European contract’s premium to West Texas Intermediate crude traded in New York widened 42 cents to $9.21 a barrel. The spread surged to a record high of $27.88 on Oct. 14.
Jobless Rate
The U.S. may have added 125,000 new workers last month, according to a Bloomberg News survey of economists before a report later today. That is considered too few to reduce 9 percent unemployment in the world’s largest oil user.
The country added another 402,000 first time seekers of unemployment insurance in the week ended Nov. 26, according to data released yesterday.
A manufacturing gauge based on a survey of purchasing managers in the 17-nation euro region fell to 46.4 from 47.1 in October, London-based Markit Economics said today. That’s the lowest level since July 2009.
China’s manufacturing contracted in November for the first time since February 2009, a purchasing managers’ index compiled by the China Federation of Logistics and Purchasing showed.
Global Oil Consumption
The U.S. and China were responsible for 32 percent of global oil consumption in 2010, according to BP Plc’s Statistical Review of World Energy released on June 8. The 17 countries using the euro accounted for about 12 percent of world demand last year, BP figures show.
Oil futures may fall next week as unemployment stays near 9 percent in the U.S., the world’s largest crude consumer, a Bloomberg News survey shows.
Eleven of 24 analysts, or 46 percent, forecast oil will fall through Dec. 9. Nine, or 38 percent, predicted a gain, and four said there will be little change. Last week, 57 percent of those surveyed projected a drop.
To contact the reporter on this story: Jacob Adelman in Tokyo at jadelman1@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
