High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/9de08a84-35f5-11e1-9f98-00144feabdc0.html#ixzz1iObhLhAV
Heightening tensions between Iran and the US boosted oil prices on Tuesday, pushing up Brent crude by more than $2.
ICE February Brent, the global benchmark, jumped $2.31 a barrel to $109.69 in European morning trading while the Nymex February West Texas Intermediate, the US benchmark, climbed $2.06 a barrel to $100.90, rising above the $100 mark hurdle.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/9de08a84-35f5-11e1-9f98-00144feabdc0.html#ixzz1iObioXqD
The Iranian state news agency quoted the country’s army chief as saying that Iran will take action if a US aircraft carrier – which left waters where the recent Iranian naval exercise took place – returned to the Gulf.
Concerns that Iran would shut the Strait of Hormuz, the gateway for Middle East crude oil exports, accounting for about one-third of the world’s seaborne supply, prompted active buying.
“The ever-growing frequency of intense sabre-rattling and muscle flexing between Iran and the US should keep the markets jittery and vulnerable to sudden price jumps,” said JBC Energy, a Vienna based consultancy.
Commodities prices were buoyed by a higher than expected rebound in China’s official purchasing managers' index. The index, which shows manufacturing activity, rose to 50.3 in December from 49 in November. A number above 50 indicates growth, while a figure below that level shows contraction.
Jian Chang of Barclays Capital, said the figures suggested “still resilient domestic demand and some stabilisation of industrial activity, albeit at a low level” into the first quarter of 2012. “With property market activity and export growth expected to slow further, we maintain our view that growth will moderate further, with the pace of slowdown steady and broadly in line with our baseline expectation of a soft landing,” Ms Chang said.
China is the world’s largest consumer of many commodities, and metals jumped on the news. Copper for three-month delivery on the London Metal Exchange, rose 1.4 per cent to $7,660.25 a tonne, while aluminium added 0.5 per cent to $2,017 a tonne, while tin added 1.4 per cent to $19,400.
Gold rallied, helped by geopolitical concerns and the China data. The decline in the dollar – regarded as a leading haven asset – against the euro also helped bullion, which rose 1.6 per cent to $1,590.69.
