Oil rebounded from the lowest close in almost nine months in New York amid speculation a European Union embargo on Iran, OPEC’s second-largest exporter, and a strike in Norway will tighten crude supplies. Futures increased as much as 2.3 percent, trimming the biggest quarterly decline since the final three months of 2008. Prices may advance after the EU’s ban on the purchase, transportation, financing and insurance of Iranian crude starts on July 1, a Bloomberg survey showed. Norway’s first industrywide strike by energy workers since 2004 entered its sixth day today. Oil extended gains after euro-area leaders announced measures aimed at stemming the region’s debt crisis. “We’re about to begin the Iranian oil embargo so we’ll start to get a look over time about what the impacts of that are going to be,� said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “It’s going to take supply off the market, but the question is to what extent that draws down inventories and affects excess capacity.� Oil for August delivery increased as much as $1.78 to $79.47 a barrel in electronic trading on the New York Mercantile Exchange and was at $79.29 at 2:17 p.m. Sydney time. The contract yesterday plunged $2.52, or 3.1 percent, to $77.69, the lowest close since Oct. 4. Prices are down 20 percent this year and have dropped 23 percent this quarter. Brent oil for August settlement rose $1.30, or 1.4 percent, to $92.66 a barrel on the London-based ICE Futures Europe exchange. Prices are down 25 percent since March 31, also the biggest decline since the final quarter of 2008. The European benchmark’s premium to West Texas Intermediate was at $13.37, from $13.67 yesterday. Iran Output Sixteen of 42 analysts, or 38 percent surveyed by Bloomberg News, forecast New York crude will increase through July 6. Fourteen predicted that futures will decline and 12 said there will be little change in prices. Iran’s daily exports will fall by 1 million barrels in the second half of this year because of sanctions, the International Energy Agency estimates. The U.S. and Europe suspect the Persian Gulf country’s nuclear program involves weapons development. The Tehran government says it is enriching uranium for civilian and medical purposes. Exports from Iran will “gradually� fall amid maintenance on fields and reservoirs starting next week, Deputy Oil Minister Ahmad Ghalebani said June 26 at an energy conference in Moscow. Shipments may decline by 20 percent to 30 percent, said Ghalebani, who is also head of National Iranian Oil Co. He also said that “maybe, yes� the maintenance was timed to coincide with the EU sanctions. China Exemption Iran’s output was 3.23 million barrels a day in May, the lowest level since June 1992, according to data compiled by Bloomberg. Saudi Arabia is the biggest shipper of crude in the Organization of Petroleum Exporting Countries. Under a U.S. law enacted Dec. 31, financial institutions may be cut off from the country’s financial system if they settle oil trades with Iran’s central bank. China, the biggest buyer of Iranian crude, and Singapore, Asia’s oil-trading hub, were granted exemptions for 180 days from the U.S. sanctions because they have “significantly reduced� their purchases, Secretary of State Hillary Clinton said in an e-mailed statement yesterday. The U.S. has granted exemptions to 20 economies since March 20. EU Talks Norway’s strike shut production of about 15 percent of the crude supply from western Europe’s largest exporter. Statoil ASA (STL), the country’s biggest energy company, puts the daily loss at as much as 250,000 barrels. The nation produced 1.63 million barrels of oil a day last month, according to the Norwegian Petroleum Directorate. Oil extended gains after EU President Herman Van Rompuy said European leaders at a summit in Brussels agreed to drop the condition that emergency loans to Spanish banks give their governments preferred creditor status. Banks can also be recapitalized directly with funds rather than going through governments and leaders discussed ways to reduce the risk premiums on Italian and Spanish bonds, he said. Gasoline for July delivery rose 0.4 percent to $2.6238 a gallon on the New York Mercantile Exchange. Prices have fallen 23 percent this quarter. Regular gasoline at the pump, averaged nationwide, slid 0.4 cents to $3.369 a gallon on June 27, according to Heathrow, Florida-based AAA, the largest U.S. motoring group. Prices have dropped 14 percent this quarter. 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

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