Latest Brent Oil Price

In London, Brent crude oil futures for March 2012 delivery was trading at $111.10 a barrel, 16.20 GMT today on the ICE Futures Exchange, or 1.1 percent higher.

IMF Warning Over Iran Sanctions

The IMF highlighted the risks of rising tensions over Iran sanctions in a note on Wednesday sent to deputies from G20 countries who met in Mexico City last week.

If Iran halts exports to countries without offsets from other sources it would likely trigger an “initial” oil price jump of 20 to 30 percent, or about $20 to $30 a barrel, the IMF said in its first public comment on a possible Iranian oil supply disruption.

The oil price impact caused by a cut in Iranian exports could be exacerbated by below average oil stocks in many countries, the result of tight oil market conditions through much of last year, the IMF said.

Financial sanctions against Tehran may be “tantamount to an oil embargo” and would imply supply declines of about 1.5 million barrels per day from the world’s fifth largest oil producer, the IMF said.

That volume of supply disruption would be comparable to losses in output from Libya last year due to civil war that pushed oil prices over US$100 a barrel. Iran exports about 2.6 million barrels per day of oil.

Oil traders are following the latest news regarding Iran after the European Union this week imposed a ban on the Islamic Republic’s oil and of assets owned by its central bank.

However, Iran’s President Mahmoud Ahmadinejad on Thursday insisted that his country would not be hurt by newly imposed Western sanctions.

“Once our trade with Europe was around 90 percent but now it has reached to 10 percent and we are not seeking this 10 percent… experience has shown that the Iranian nation will not be hurt.” Ahmadinejad said on state television today.

Latest WTI Oil Price

US Light crude oil futures for March 2012 delivery was trading at $100.82 a barrel, 16.07 GMT today in electronic trading on the NYMEX, or 1.1 percent higher.

US Oil Stocks Data

The US EIA (Energy Information Administration) said that domestic crude oil inventories jumped 3.6 million barrels in the week to January 20, far above the 800,000 barrel build forecast in a recent poll.

However, the EIA’s data was far less than the 7.3 million barrel build reported by industry group American Petroleum Institute on Tuesday.

Crude oil inventories increased strongly versus an expectation for only a modest build. With a decrease in stocks this week the crude oil inventory status versus last year is now showing a deficit of around 5.8 million barrels while the surplus versus the five year average for the same week widened to around 11.7 million barrels.

Crude oil inventories in this region of the US have been in a decline and are still at levels not seen since 2010 when the Brent/WTI spread was trading at significantly lower levels.

The spread between US WTI and European Brent oil futures continues to hold its gains mostly due to the concerns over the possible EU embargo of Iranian oil purchases.

Latest Brent Oil Price

In London, Brent crude oil futures for March 2012 delivery was trading at $111.22 a barrel, 15.30 GMT today on the ICE Futures Exchange.

Some analysts suppose, the embargo is likely to do far more damaging to European nations than it would ever be to Iran.

Iranian oil accouns for 34.2 percent of Greek oil imports, 15 percent of Spain’s and 12.4 percent of Italy’s in the first nine months of last year, according to the latest EU statistics.

“We were hoping to see the EU agreement effective right away. They’re talking about July 1, so that’s a little bit of a negative.” said Tom Bentz, director at BNP Paribas Prime Brokerage.

US Oil Demand at 15 Year Low

Traders said that oil prices are being held in check by signs of extremely weak demand in the US, the world’s biggest oil consumer. American crude oil demand in the latest four weeks fell to a 15 year low, US government data had recently showed.

Latest WTI Oil Price

US Light crude oil futures for March 2012 delivery was trading at $99.67 a barrel, 15.06 GMT today in trading on the NYMEX. The US oil contract is up 1.2 percent over this mornings opening price of $98 a barrel.

Brent North Sea crude oil futures climbed to $111.16 on the ICE Futures Exchange, also 1.2 percent higher.

Oil Price Rises

Experts are cautious about a new embargo of Iranian oil, as it could lead to significant oil prices rises in a long term, but the short term consequences are likely to be modest.

“EU foreign ministers today will decide to impose an oil embargo on Iran. That said, the import ban is unlikely to happen overnight but will be implemented gradually over a period of several months, which should dampen its inflationary effect on the oil price.” said Commerzbank analyst Carsten Fritsch.

­“There’re no significant changes on the market right now.” said Sergey Vakhrameev from the Metropol invest company.

$130 to $140 a Barrel

“In the long term it would depend on the situation, if Iran would block the Straits of Hormuz, prices would be up to $130-140, if a war begins they would jump to $200. Oil prices are excessive due to the geopolitical risks.” said Vakhrameev.

Latest WTI Oil Price

US Light crude oil futures for March 2012 delivery was trading at $101.21 a barrel, 08.21 GMT this morning in electronic trading on the NYMEX.

IEA Oil Outlook Update

The International Energy Agency took an ax to its oil demand forecast, after consumption fell in the fourth quarter of 2011 for the first time since the tail end of the credit crunch.

The IEA cut a further 500,000 barrels a day from its oil demand forecast for the first quarter of 2012, citing the same “growth impeding” combination of economic woes in Europe and continued high prices due to the tensions between Iran and the West.

Oil demand growth for the whole of 2012 was cut by 200,000 barrels a day to 1.1 million barrels a day.

The IEA, which represents major energy consuming countries, warned of “the rising likelihood of a sharp economic slowdown, if not outright recession,” that creates the possibility of zero oil demand growth in 2012.

“The data is supportive of our view that the oil price should move lower in the first half of 2012,” analysts at Bernstein Research said in a note to clients.

Not in a Bull Market

The IEA forecast, “should be a clear warning signal that we are not in a bull market,” said Tim Evans, an oil analyst with Citie Futures Perspective, though he said investors’ focus currently lies elsewhere.

“There are a whole lot of traders out there that are focused on things outside of the physical fundamentals, whether that is tensions with Iran or the S&P 500,” he said.

Oil prices have been stuck in a tight range near $100 a barrel since the beginning of the year.

Investors remain concerned about demand declines in oil and fuel products and the situation in Europe, but many are equally worried that rising tensions between Iran and the West could scuttle bets on falling oil prices.

Latest Brent Oil Price

In London, Brent crude oil futures for March 2012 delivery was trading at $112.07 a barrel, 07.58 GMT this morning on the ICE Futures Exchange.

The European oil contract finished Tuesday’s trading session at $111.66 a barrel, or 0.3 percent higher on the day after choppy trading from $110.54 to $112.79.

The intraday peak was above Brent’s 200 day moving average of $112.45.

European Stock Markets

European stock markets rallied Tuesday on news of upbeat economic data in Asian powerhouse China and surging investor confidence in the eurozone’s leading economy Germany.

Dealers largely shrugged off Monday’s downgrade of the eurozone rescue fund, the EFSF, and turned bullish after successful short-term bond auctions by the EFSF and Spain.

At close, London’s FTSE index of leading companies rose 0.65 percent to 5,693.95 points. In Paris, the CAC-40 index gained 1.4 percent at 3,269.99 points and in Frankfurt the DAX 30 jumped 1.82 percent to 6,332.93 points. Elsewhere in Europe, Milan gained 0.69 percent, Madrid 1.01 percent, Lisbon 0.43 percent, Brussels 1.35 percent, Zurich by 0.41 percent and Amsterdam 0.77 percent.

On currency markets the US dollar lost 0.3 percent to $1.27740 per euro. A weaker US dollar tends to push both Brent and US WTI oil prices higher.

“Brent looks to be reflecting the eurozone concerns. The China GDP was good, but exports were down and that highlights the slowdown in Europe.” said John Kilduff, a partner at hedge fund Again Capital, New York.

Latest WTI Oil Price

US Light crude oil futures for March 2012 delivery was trading at $101.35 a barrel, 07.45 GMT today in electronic trading on the NYMEX.

The US oil contract closed off yesterday’s trading session at $100.71 a barrel, or 1.1 percent higher.

China Growth Figures

China’s economy grew 8.9 percent in the fourth quarter of 2011, although the figure was smaller than a year ago, it came in above many analysts expectations and remains well above rates in the US and Europe.

“If you ask me, 8.9 percent is still pretty good growth. If the bearish thing you’re seeing is growth of 8.9 percent, is that so bearish?” said Peter Donovan, vice president at oil options brokerage Vantage Trading in New York.

“People have overblown this whole idea that China is slowing down.” said Carl Larry, head of the trading advisory Oil Outlooks and Opinions in New York.

The oil market has increasingly turned to China and other emerging markets to support demand and prices in recent years, as the country continues to enjoy brisk growth despite weakness in the US and Europe.

That growth has helped feed surging demand for cars and energy, and has made China the second largest oil consumer after the US.

Latest Brent Oil Price

In London, Brent crude oil futures for March 2012 delivery was trading at $112.49 a barrel, 08.10 GMT today on the ICE Futures Exchange.

The February 2012 oil contract expired on 14th February.

“The (European Union) embargo on Iranian oil could be be brought forward, and this is supporting the increase in crude prices,” said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

EU foreign ministers are due to meet on January 23 to finalize the timeline for an embargo on Iran as part of fresh sanctions over claims the country is building an atomic bomb.

Iran – EU Embargo

France is seeking a faster implementation of the EU embargo which is due to be discussed on 23 January, while many of the eurozone’s troubled economies that depend on Iranian oil are seeking a six month delay.

Tensions were further stoked as Tehran warned Gulf states not to make up for any shortfall if its oil exports are cut as a result of new sanctions.

If Arab neighbours compensate for a looming EU ban on Iranian imports, “we would not consider these actions to be friendly.” Iran’s representative to OPEC, Mohammad Ali Khatibi, warned in remarks published on Sunday.

Meanwhile, Europe’s continuing crisis would spark volatility in oil prices but Brent crude could stay above $110 a barrel in the short to medium term. Slowing growth in China, a major oil consumer, could also dampen sentiment for higher oil prices.

Latest WTI Oil Price

US Light crude oil futures for March 2012 delivery was trading at $100.64 a barrel, 07.55 GMT this morning in electronic trading on the NYMEX.

The February 2012 US oil contract expired on 16th January.

Saudi Oil Price Goals

Saudi Arabia aims to stabilise the average of crude oil prices worldwide at around $100 a barrel in 2012, Ali al-Naimi said in an interview yesterday. High quality global journalism requires investment.

“Our wish and hope is we can stabilise this oil price and keep it at a level around $100 a barrel. If we were able as producers and consumers to average $100 I think the world economy would be in better shape.” Mr Naimi told CNN.

Saudi Arabia is aiming to keep oil prices at about $100 a barrel, a third above its previous public target, in a sign that Riyadh needs higher oil revenues to sustain a big rise in public spending.

Ali Naimi, the Saudi oil minister, on Monday for the first time said the world’s largest oil producer aimed to keep oil prices at the triple digit level.

Saudi Arabia, the biggest producer in OPEC, can make up for any loss of crude oil output if sanctions are placed on Iran, al-Naimi told reporters.

“The Saudis need to spend more money to keep their citizens quiet and prevent protests.” said Carsten Fritsch, an oil analyst at Commerzbank.

Meanwhile, France wants an EU embargo delayed by no more than three months as members seek alternative supplies, an official with knowledge of the matter said yesterday.

Iran, OPEC’s second largest producer, has threatened to block oil shipments through the Strait of Hormuz in retaliation against international sanctions.

Latest WTI Oil Price

US Light crude oil futures for February 2012 delivery was trading at $100.02 a barrel, 07.20 GMT this morning in electronic trading on the NYMEX. The US oil contract closed off Thursday’s session a $99.10 a barrel, or 1.9 percent lower on the day.

Communication to Iran

The New York Times, citing unnamed US officials, said late on Thursday that the White House has communicated to Iran’s Supreme Leader Ayatollah Ali Khamenei that closing the strait would be a “red line” and provoke a response.

The officials did not provide further details about the covert communication channel, except to say that it was separate from the Swiss government, through which the United States occasionally relays messages to Iran’s leaders.

The United States and its allies have stepped up increasingly harsh sanctions on Iran over its nuclear enrichment program, which they have charged is part of a secret drive to develop nuclear weapons.

Latin America Tour

Iranian President Mahmoud Ahmadinejad on Friday wraps up a four nation tour of Latin America that yielded kind words from ideological allies but no clear offers to help ease Western sanctions against its nuclear program.

The limited results from his tour of Venezuela, Nicaragua, Cuba and Ecuador reinforce the view that Iran will need to rely on diplomatic heavyweights like China or Russia to help stave off sanctions that for the first time threaten its oil income.

On New Year’s Eve, US President Barack Obama signed into law by far the toughest financial sanctions yet against Iran. If fully implemented, they could make it exceedingly difficult for most countries to pay for Iranian oil.

Latest Brent Oil Price

In London, Brent crude oil futures for February 2012 delivery was trading at $112.17 a barrel, 07.05 GMT today on the ICE Futures Exchange.

The contract closed off Thursday’s trading session at $110.97 a barrel, or 1.1 percent lower.

Iranian Oil Embargo

A EU embargo on imports of Iranian oil will probably be delayed for six months to let countries such as Greece, Italy and Spain find alternative supplies, an EU official with knowledge of the talks said.

The embargo, which would need to be accepted by the EU’s foreign ministers on January 23rd, also is likely to include an exemption for Italy, so crude can be sold to pay off debts to Rome-based Eni SpA, Italy’s largest oil company, according to the official, who declined to be identified because the talks are private.

A ban on petrochemical products would start sooner, about three months after EU ministers agree to the measure, the official said.

“Work by experts from the 27 member states is in a very intensive phase. They are looking into different options for restrictive measures with a view to adoption on Jan. 23.” Maja Kocijancic, a spokeswoman for the European Commission, said by phone yesterday from Brussels.

“That’s been the real driver behind this late-day sell-off. That’s been the only thing keeping prices in triple digits. Once you take the Iranian piece out of the puzzle, we’re left with poor economic data and poor US fundamental crude data. This is definitely an unwinding of that Iran premium.” said Matt Smith, an analyst at research firm Summit Energy.

EU Sanctions – Embargo

The EU are bringing forward a meeting which will determine when an embargo on Iranian crude will be enforced as an agreement in principle to ban imports of oil already exists.

China Off the Hook?

“Most of it has been priced in because the embargo news came out a week ago. Markets are jittery. We know if the EU imposes the embargo then Iran will probably send most of its crude to China.” Amrita Sen, commodities analyst at Barclays Capital, said.

Sen added that a crucial impact on oil prices would be if other countries outside of America and Europe joined in with an embargo of Iranian oil.

The threat to the supply of Iranian crude has risen dramatically in recent weeks, with a war of words erupting from the US and a threat by the EU that it will also be seeking to ban imports of Iranian oil.

“If the Strait of Hormuz is affected in any way we are looking at significantly higher oil prices. I wouldn’t even dare to put a price on it, but around $200 dollars a barrel.” Sen added.

Oil Prices Well Supported

Oil prices have been well supported in recent sessions on fears that Iran may make good on threats to cut off access to the Strait of Hormuz, a narrow passageway that connects the oil rich Persian Gulf nations with the rest of the world.

Meanwhile, Nigerian oil workers threatened on Wednesday to shut down output in Africa’s top crude producer, deepening a national strike over a more than doubling of petrol prices. Nigeria exports over 2 million barrels of crude oil per day and is a major supplier to the US and Europe.

Whilst Iran is the world’s fourth largest oil producer, pumping nearly 5 percent of the world’s oil in 2010. The threat of a major crude oil supply disruption from the country has helped support both WTI and Brent oil prices in recent weeks.

Latest WTI Oil Price

US Light crude oil futures for February 2012 delivery was trading at $101.09 a barrel, 20.45 GMT today on the NYMEX, or down 1.4 percent on the day.

US Weekly Oil Stocks

The US EIA said in its weekly oil stocks report that US Light crude oil inventories rose by 5 million barrels in the week ended January 6, significantly higher than expectations for a 1 million barrel increase.

Total US crude oil inventories stood at 334 million barrels as of last week, above the upper limit of the average range for this time of year.

Oil prices were also affected by a broadly stronger US dollar, which re-approached a 16 month high against the euro, while the ICE US Dollar Index, which tracks the US dollar against six major world currencies, was up 0.7 percent to trading at 81.72.

Meanwhile, oil traders continued to monitor tensions between Iran and the West after Iran’s Fars news agency reported that an Iranian nuclear scientist was killed in a bomb explosion in northern Tehran earlier in the day.