Brent ends at 8-month high on supply risks

Wed Feb 15, 2012 4:32pm EST
 
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By Gene Ramos

NEW YORK (Reuters) - Brent oil settled at an eight-month high on Wednesday as fears of supply disruptions from Iran producers and Africa outweighed worries about the global economy.

Crude markets found early support from an Iranian state media report, which was later denied by the oil ministry, that Tehran had banned oil exports to six European Union countries in retaliation for EU sanctions.

Threats of a potential loss of exports from the OPEC member over the West's standoff with Iran over its nuclear program have gripped oil markets for months, and added to bullish sentiment following disruptions in other producing countries.

An explosion hit a major oil pipeline feeding a refinery in Syria on Wednesday and a strike in Yemen has halted output at its largest oilfield. In addition, Sudan seized more of South Sudan's oil in a dispute over payment issues which has shut down the 350,000 barrel per day pumped by the new nation.

The news outweighed concerns about the euro zone crisis, which has kept markets on edge due to a potential impact on demand.

"The oil markets are doing a balancing act between what's happening in Iran and the euro zone, where the Greek bailout deal may still fall apart," said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut.

In London, ICE April Brent crude settled at $118.93 a barrel, gaining $1.58 and posting the highest close since June 14's close at $120.16. It climbed early to a session peak of $119.99, the highest intraday since August 1, on the report that Iran was halting oil exports to some EU countries.

U.S. March crude settled at $101.80 a barrel, gaining $1.06, the highest close since January 11. It hit an early peak of $102.54, the highest intraday since January 12.   Continued...

 
A view of a drilling rig and distant production platform in the Soldado Field off Trinidad's southwest coast, September 10, 2011. REUTERS/Andrea De Silva