Oil advanced in New York, trimming the biggest weekly decline in a month, as signs Europe’s debt crisis is easing countered indications a proposed embargo on Iranian crude will be delayed. Futures gained as much as 0.5 percent as Asian equities rose after borrowing costs for Spain and Italy fell at debt sales yesterday. Oil also climbed after Nigerian labor unions said they will continue a strike that threatens crude exports from Africa’s top producer. Planned European Union sanctions on Iran may be postponed by six months to allow countries such as Greece, Italy and Spain to find alternative petroleum supplies, according to an EU official with knowledge of the talks. “It’s a case of Iranian embargo versus a mildly risk-on attitude as a consequence of the so-far so-good Italian and Spanish bond auction,� said Ric Spooner, a chief analyst at CMC Markets in Sydney. Nigeria “is certainly another aspect� that’s affecting the market, he said. Crude for February delivery increased as much as 54 cents to $99.64 a barrel in electronic trading on the New York Mercantile Exchange. It was at $99.53 at 2:56 p.m. Sydney time. The contract yesterday fell $1.77, or 1.8 percent, to $99.10, the lowest close since Dec. 30. Prices are down 2 percent this week, the biggest decline since the period ended Dec. 16, and up 0.7 percent this year. Brent oil for February settlement rose 44 cents to $111.70 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $12.17, compared with a record $27.88 on Oct. 14. ‘Tentative Signs’ The European Central Bank’s injection of cash into the financial system last month is lubricating credit markets and there are “tentative signs� of economic stabilization in the euro area, ECB President Mario Draghi said in Frankfurt yesterday. While “substantial downside risks� remain, he pointed to falling yields on Italian and Spanish debt. Italy sold 12 billion euros of Treasury bills, with the rate on the one-year bills plunging to 2.735 percent from 5.952 percent at the last auction of similar-maturity securities on Dec. 12. Spain sold 9.98 billion euros of bonds maturing in 2015 and 2016, twice its maximum target. The yield on the three-year note dropped to 3.384 percent from 5.187 percent last month. Nigeria Strike Nigerian labor unions said yesterday they will continue a strike that threatens oil exports from Africa’s top producer because no agreement has been reached yet with President Goodluck Jonathan on restoring fuel subsidies. The unions plan to resume talks with the president tomorrow, Abdulwaheed Omar, president of the Nigeria Labour Congress, told reporters at a press conference in the capital Abuja. The oil union Pengassan said it would begin shutting down oil output on Jan. 15 if there was no agreement with the government, while its counterpart Nupeng said it has withdrawn its workers from fields operated by companies such as Royal Dutch Shell Plc (RDSA) to back the strike. Oil in New York traded above $100 a barrel every day this year before today, amid Iranian threats to respond to sanctions by shutting the Strait of Hormuz, a transit route for a fifth of the world’s crude. It rose to $103.74, the highest intraday price in almost eight months, on Jan. 4 after the EU said foreign ministers intend to announce harsher sanctions on Iran’s energy and banking industries at their next meeting. European Talks Phasing in the European embargo would satisfy the concerns of countries most dependent on Iranian oil, including Italy, Greece and Spain, the EU official said, declining to be identified because the talks are private. Those three nations accounted for 68.5 percent of EU imports from Iran in 2010, according to European Commission data. Sanctions, which would need to be agreed on by the foreign ministers of the 27-nation bloc on Jan. 23, are also likely to include an exemption for Italy so crude can be sold to pay off debts to Rome-based Eni SpA (ENI), the nation’s largest oil company, according to the official. The risk of higher oil prices in 2012 is “increasingly skewed to the upside� amid tighter supply and gains in demand, according to Goldman Sachs Group Inc. Iranian crude embargoed by the European Union will be replaced by Saudi Arabian supplies while China will take the surplus, Jeffrey Currie, head of commodities research at the bank in London, said in a report today. Crude shipments from OPEC will reach the highest level in almost a year amid rising exports from Libya, according to tanker-tracker Oil Movements. The Organization of Petroleum Exporting Countries will export 23.66 million barrels a day in the four weeks to Jan. 28, the most since Feb. 12, 2011, the Halifax, England-based researcher said yesterday in an e-mailed report. The figures exclude Angola and Ecuador. To contact the reporters 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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