Tags: Brent | Oil | Supply | Iran

Brent Oil Hits Six-Month High on Supply Worries, Iran

Wednesday, 15 Feb 2012 12:31 PM

Brent oil climbed to a six-month high on Wednesday, as fears of supply disruptions from Iran, other Middle East producers and Africa outweighed concerns about the global economy.

Data showing a surprise drawdown in U.S. oil inventories last week helped firm crude futures, which had pared gains following a denial by Iran's oil ministry of a state media report that Tehran had banned oil exports to six European Union countries in retaliation for EU sanctions.

By 12:15 p.m. EST (1715 GMT), ICE April Brent crude was up $1.25 at $118.60 a barrel, having hit a session high of $119.99, the highest intra-day price since Aug. 1.

U.S. March crude gained 85 cents at $101.59, off its early high of $102.54, steepest intraday since Jan. 12.

"Bubbling of tensions with Iran will always be supportive of the oil price, and this latest development is no different," said Harry Tchilinguirian, analyst at BNP Paribas.

U.S. crude oil inventories showed a surprise, if modest, drop of 171,000 barrels in the week to Feb. 10, defying the forecast in a Reuters poll for a 1.5 million barrel increase and going against industry data released late Tuesday showing a 2.9 million barrel build.

Crude stocks held at the Cushing, Oklahoma, delivery hub for U.S.-traded crude oil futures rose to their highest level since September, posting a 2.0-million-barrel build, which was the biggest weekly increase since December 2009.

The gain in Cushing stocks helped widen Brent's premium against U.S. crude to near $17 a barrel. The gap had narrowed on Tuesday to $16.27.

An explosion hit a pipeline in Syria on Wednesday, a strike in Yemen has halted output at its largest oilfield and Sudan seized more of South Sudan's oil in a dispute over payment issues.

Oil supply risks far outweigh the effects of the euro zone's debt problems, highlighted by the still unresolved quest of Greece to obtain a second debt bailout.

© 2017 Thomson/Reuters. All rights reserved.

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