BLBG:Oil Trades Near One-Week High as Iran Tension Counters European Economy
Oil traded near the highest settlement in almost one week as concern that supplies from Iran will be disrupted countered speculation Europe may enter a recession as it struggles to tame its debt crisis.
Oil pared losses of as much as 0.6 percent after Iran’s Fars news agency said a nuclear scientist was killed in a bomb attack in Tehran. U.S. Treasury Secretary Timothy F. Geithner is visiting China and Japan as he seeks to urge them to cut Iranian petroleum imports. Iran has threatened to respond to sanctions over its nuclear program by shutting the Strait of Hormuz. Reports today may show German economic growth slowed last year and Spanish factory output shrank the most since 2009.
Crude for February delivery was at $102.27 a barrel, up 3 cents, in electronic trading on the New York Mercantile Exchanged at 3:13 p.m. Singapore time. The contract yesterday climbed 0.9 percent to $102.24, the highest close since Jan. 4. Prices are up 3.5 percent this year.
Brent oil for February settlement rose 11 cents to $113.39 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $11.12, compared with $11.04 yesterday and a record $27.88 on Oct. 14.
Mostafa Ahmadi Roshana, a director at the Natanz uranium enrichment facility in Iran’s Isfahan province and a professor at Tehran’s technical university, was killed in the bomb blast today, Fars said.
Geithner Visit
U.S. Treasury Secretary Timothy F. Geithner is in Beijing for talks with Chinese Premier Wen Jiabao and visits Japan tomorrow. The Asian countries are the largest importers of Iranian oil, with China accounting for 22 percent and Japan buying 14 percent during the first half of last year, according to the U.S. Energy Information Administration.
“China will be less OK with it than Japan,” Matthew Levitt, a former financial intelligence official at the Treasury Department who is now at the Washington Institute for Near East Policy, said about the plan for sanctions.
Oil fell earlier after four diplomats said European Union discussions on blocking imports of Iranian oil are bogged down. Greece, Italy and Spain are trying to soften a U.K. push for a blanket purchases on imports, on concern that a supply shock would add to the economic damage from the European debt crisis, the diplomats said, declining to be identified because no final agreement has been reached. Foreign ministers from the 27 EU member states are scheduled to decide on sanctions at a Jan. 23 meeting in Brussels.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
