Oil rose from a three-day low in New York after President Barack Obama said the U.S. may use military force to stop Iran from developing a nuclear weapon and Enbridge Inc. (ENB) shut a pipeline in Illinois. Futures climbed as much as 0.6 percent, rebounding from the firstly weekly loss in four. Israeli Prime Minister Benjamin Netanyahu meets Obama in Washington today for talks on Iran’s nuclear program. London-traded Brent’s premium to West Texas Intermediate narrowed after Enbridge closed the pipeline following a vehicle collision and fire at a pumping station. Oil prices rallied March 1 after a reported pipe explosion in Saudi Arabia that was later denied. “You can always gauge how nervous the market is� after news of a pipeline closure, said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “That’s the jittery nature of the market at the moment. Iran is still a wildcard.� Oil for April delivery gained as much as 59 cents to $107.29 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.94 at 2:23 p.m. Singapore time. The contract fell 2 percent to $106.70 on March 2, the lowest since Feb. 28. Prices slipped 2.8 percent last week and are 1.4 percent higher the past year. Brent oil for April settlement was at $123.82 a barrel, up 17 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $16.88, compared with $16.95 on March 2. It reached a record of $27.88 on Oct. 14. Iran Tension The U.S. won’t hesitate to use military force against Iran if necessary, while there is still time for diplomacy and sanctions to work, Obama told a conference of the American Israel Public Affairs Committee yesterday. Prices slid the most this year on March 2 after he said in an interview with The Atlantic magazine that a pre-emptive strike might generate “sympathy� for the Persian Gulf country. Iran may shut the Strait of Hormuz if the country is threatened, reiterated Masoud Jazayeri, the country’s deputy chief of military staff, according to Iraq’s Biladi television, which cited an interview. The waterway is a transit route for a fifth of the world’s oil. Enbridge was forced to shut lines 14/64 and 6A after two people were killed and several others injured in the crash that ignited the fire at a pumping station near New Lenox, Illinois, about 36 miles (58 kilometers) southwest of Chicago. Pipeline Schedule The 6A line, with a capacity of 670,000 barrels a day, has since resumed, Calgary-based Enbridge said. The 14/64 line can carry 320,000 barrels a day. Line 14 is forecast to be shut until the evening of March 7 and 64 until the afternoon of March 8, Lorraine Little, a Superior-based spokeswoman for Enbridge, said in an e-mail. New York crude is also rebounding as futures remain within an upward-sloping trend channel on the daily chart going back about a month, according to data compiled by Bloomberg. The bottom of this channel, representing technical support, is around $106.40 a barrel today. Buy orders tend to be clustered near chart-support levels. Hedge funds increased net-long positions in crude oil by 5 percent to 272,032 in the seven days ended Feb. 28, according to the Commodity Futures Trading Commission’s Commitments of Traders report. Wagers gained a fourth week to the highest since May 3, the report showed. 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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