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Commodities: Iran reports fuel crude rally

Date: Thursday 16 Feb 2012

Crude oil futures rose 1.1% on Wednesday after an Iranian state media report said oil exports to six European nations had been cut.

The nation's media press said Iran had cut oil exports to France, Spain, Italy, the Netherlands, Portugal and Greece in retaliation against sanctions imposed by the European Union. The reports were later denied by Iranian officials.

Despite the denial, crude oil for March delivery still rose $1.06, or 1.1%, to $101.80 a barrel on the New York Mercantile Exchange. It hit an intra-day high of $102.54.

Oil prices were also supported by US data showing an unexpected decline in crude oil supplies. Stockpiles fell 171,000 barrels in the week to 10 February, confounding forecasts of a 1.5m-barrel increase.

Meanwhile Brent crude oil settled at an eight-month high of $118.93, up $1.58 or 1.3% on fears of supply disruptions from Iran.

Reports of an explosion at a major oil pipeline in Syria also fuelled concern about supply disruptions.

Bullion snapped its recent losing streak on Wednesday and piled on over $10 an ounce as jitters over the euro zone debt crisis persist.

Gold for April delivery settled up $10.40 at $1,728.10 an ounce on the Comex division of the New York Mercantile Exchange.

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