Oil jumps 4 percent on Iran anxiety
By Robert Gibbons
NEW YORK (Reuters) - Oil prices surged on Tuesday, with U.S. crude hitting the highest settlement since May, fueled by strong economic data from the United States and China and mounting concern about supply disruption from Iran.
Brent crude jumped $5 in late activity as markets latched on to data showing U.S. construction spending near a 1-1/2 year peak in November and China manufacturing data that eased concerns of a slowdown in the world's No. 2 oil consumer.
Tuesday's gains on the first day of trading in the new year added to Brent's 13 percent rise in 2011, with support in recent weeks coming from Iranian threat's to choke of crude oil shipments through the strategic Strait of Hormuz in Tehran's ongoing standoff with the West.
"The supportive economic data and the geopolitical concerns are furthering the crude oil rally," said John Kilduff, partner at hedge fund Again Capital LLC in New York.
"The temperature is going up every day now on the Iran situation -- new sanctions, new missile launches, and saber rattling are all contributing," Kilduff added. .N
Brent February crude rose $4.75 to settle at $112.13 barrel, the highest close since the November 15 settlement at $112.39. It reached as high as $112.44 a barrel in post-settlement activity.
U.S. February crude rose $4.13 to settle at $102.96 a barrel, the highest close since May 10, after reaching a high of $103.37 earlier -- the highest intraday level since November 17.
Crude futures trading volumes rebounded after two weeks of thin holiday trading. Brent volume climbed 29 percent above its 30-day average, with U.S. volume 32 percent above its 30-day average. Continued...