Oil rose to a one-month high after a report that Iran had cut oil shipments to six European countries and as China pledged to help resolve Europe’s debt crisis.
Futures climbed as much as 1.8% after Iran’s state- run Press TV said exports were halted to Italy, Spain, France, Greece, Portugal and the Netherlands, without citing anyone. China will invest in Europe’s bailout funds, Central Bank Governor Zhou Xiaochuan said in Beijing. Crude extended gains after the Energy Department said U.S. supplies fell last week.
Oil for March delivery rose $1.01, or 1%, to $101.75 U.S. a barrel at 11:15 a.m. ET on the New York Mercantile Exchange. The contract touched $102.54, the highest level since Jan. 12, and traded at $101.40 U.S. a barrel before release of the inventory report at 10:30 a.m. ET Prices have risen 21% in the past year.
Brent oil for April settlement increased $1.65, or 1.4%, to $119 U.S. a barrel on the London-based ICE Futures Europe exchange.
The European Union agreed in January to halt oil purchases from Iran as of July 1. The foreign ministry in Tehran summoned the six nations’ ambassadors to protest E.U. sanctions on the country’s nuclear program, the state-run Fars news agency reported.
Concern that a confrontation between the Persian Gulf producer and Western nations may block shipments has added about $10 a barrel to the price of crude, according to analysts at UBS AG, Switzerland’s biggest bank.
Zhou’s pledge to invest in Europe’s bailout funds and sustain its holdings of euro assets echoed comments by Premier Wen Jiabao yesterday and sparked optimism Europe will overcome a debt crisis that threatens renewed market turmoil.
E.U. finance ministers will hold a teleconference today to urge Greece to do more to clinch an aid package worth 130 billion euros ($171 billion U.S.) and about 100 billion euros of debt relief from private bondholders. The nation’s two biggest political parties will provide written commitments to austerity pledges, a government official in Athens said.
U.S. inventories of crude oil declined 171,000 barrels to 339.1 million last week, the Energy Department report showed. Supplies were forecast to increase 1.5 million barrels, according to the median of 13 analyst responses in a Bloomberg News survey.
Stockpiles of distillate fuel, a category that includes heating oil and diesel, fell 2.87 million barrels to 143.7 million. It was the biggest decrease since Nov. 4. Supplies were forecast to fall 1.1 million barrels.
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