Reuters: Oil extended gains to above $99 a barrel on Monday, bolstered by Iran’s warning that more U.N. sanctions would be “costly” to Western powers, and after Turkey’s incursion into northern Iraq. By Fayen Wong
SYDNEY (Reuters) – Oil extended gains to above $99 a barrel on Monday, bolstered by Iran’s warning that more U.N. sanctions would be “costly” to Western powers, and after Turkey’s incursion into northern Iraq.
U.S. light crude for April delivery rose 57 cents to $99.38 a barrel by 0226 EST, adding to Friday’s 58 cents gain.
London Brent crude rose 66 cents to $97.67 a barrel.
“Prices are influenced by fresh geopolitical concerns as Turkish troops crossed into northern Iraq in an offensive against Kurd militants,” David Moore, a resource analyst at the Commonwealth Bank of Australia, said in a note to clients.
“There is also a possibility that tensions surrounding Iran’s nuclear program may intensify.”
Iran warned Western countries on Sunday that they would be the ones to suffer if they passed a new U.N. sanctions resolution on the Islamic Republic, raising the specter that the world’s fourth-largest oil exporter would cut crude exports.
“Some Western powers are… choosing a wrong path and passing resolutions against Iran will be costly for them,” Javad Vaeedi, deputy chief nuclear negotiator, was quoted by Iran’s official news agency IRNA as saying. Vaeedi did not elaborate.
The International Atomic Energy Agency said in a report on Friday that Iran had shown new openness about nuclear advances, but not enough to prove the program was not geared to bomb making.
The United States, Britain and France have said they hope the U.N. Security Council would vote on a third round of sanctions.
Oil’s gain was also supported by Turkey’s major attack on Kurdish PKK guerrillas in northern Iraq, which has raised fears that the offensive could further destabilize Iraq and disrupt oil supplies.
Although the Turkish-Kurdish dispute has increased in scale, analysts have played down its threat to oil supplies, saying that the recent attacks are more illustrative of political instability in the Middle East and are unlikely to pose direct threats to oil flows in the region.
Iraq’s state-owned Northern Oil Company said on Sunday Iraq’s oil exports to Ceyhan in Turkey will not be disrupted.
But reflecting the threats to Middle Eastern supply, a Yemeni security official said on Sunday they had foiled a bid to blow up a crude oil pipeline in the Marib province and arrested a number of “saboteurs”.
Oil surged to a record $101.32 on Wednesday, near the inflation-adjusted high of $102.53 hit in April 1980, as supply concerns and a rush of speculator money outweighed worries of a U.S. economic recession.
The Organization of the Petroleum Exporting Countries is unlikely to agree to a change in oil output at its meeting on March 5, as high prices and concern about the economy balance expectations for a seasonal demand fall, an OPEC delegate said on Sunday.
Crude speculators on the New York Mercantile Exchange increased long positions sharply last week, according to data from the Commodity Futures Trading Commission released Friday.
Net crude long positions rose to 60,873 in the week to February 18, compared with 39,933 in the previous week.
(Editing by Ramthan Hussain)