Oil up on Iran dispute, IMF lending moves
By Robert Gibbons
NEW YORK (Reuters) - Oil prices rose in choppy trading on Tuesday as efforts to strengthen sanctions on Iran and regional unrest hiked the geopolitical fear premium and offset worries about global economic growth.
The euro rallied against the dollar and helped boost dollar-denominated oil after the International Monetary Fund beefed up its lending instruments and introduced a new six-month liquidity line designed to help countries at risk from the euro zone debt crisis.
"It's Iran sanctions, Egypt and Syria and even Libya today, putting the fear premium into prices, especially ahead of the (U.S. Thanksgiving) holiday," said Dominick Chirichella, senior partner, Energy Management Institute in New York.
The U.S, Britain and Canada on Monday announced new sanctions on Iran's energy and financial sectors to put more pressure on Tehran to abandon what the U.N.'s International Atomic Energy Agency said were attempts to use its nuclear program develop weapons.
ICE Brent January crude rose $2.15 to settle at $109.03 a barrel, breaking a string of four straight lower closes. Brent's intraday low on Monday was just above front-month Brent's 300-day moving average of $105.61, providing a technical boost, traders said.
U.S. January crude, up after three days of losses for front-month crude, rose $1.09 to settle at $98.01 a barrel, having swung from $96.55 to $98.70. Traders noted technical support accrued after a brief dip on Monday just below its 200-day moving average.
Brent's premium to its U.S. counterpart rose above $11 a barrel, strengthening a fourth-straight day after falling to $5.58 intraday on November 17.
Crude trading volumes remained tepid as Thursday's U.S. Thanksgiving holiday approached. Both Brent and U.S. crude volumes were about 19 percent below their 30-day averages with less than 30 minutes left in post-settlement trading. Continued...