Oil rose for the first time in four days on growing concern that geopolitical tension in the Middle East may disrupt supply and as higher stock markets raised economic optimism.
Oil gained as much as 2.1 percent as the European Union brought forward a meeting on a possible oil embargo against Iran to Jan. 23 from Jan. 30. U.S. stock futures and European equities gained as French business confidence climbed from a two-year low last month.
“We’ve put in at least $10 a barrel, if not more, Iranian risk premium in the price of oil,” said Phil Flynn, an analyst with PFGBest in Chicago. “There is a certain optimism about what’s going on in the U.S. economy and we are feeling a little bit better about Europe.”
Crude for February delivery climbed $1.92, or 1.9 percent, to $103.23 a barrel at 9:08 a.m. on the New York Mercantile Exchange. Prices have surged 21 percent in the past three months.
Brent oil for February settlement increased $1.05, or 0.9 percent, to $113.50 a barrel on the London-based ICE Futures Europe exchange.
Iran began enriching uranium at a fortified nuclear site, the International Atomic Energy Agency said yesterday, a move that drew condemnation from the U.S. and France and may accelerate the imposition of stricter sanctions.
Uranium Enrichment
“Iran has started the production of uranium enriched up to 20 percent” in the Fordo Fuel Enrichment Plant, IAEA spokesman Gill Tudor said in an e-mail. “All nuclear material in the facility remains under the agency’s containment and surveillance.”
U.S. State Department spokeswoman Victoria Nuland said the enrichment represented an intensification of Iranian violations of United Nations agreements on its nuclear program and called on Iran to suspend enrichment activities.
Iran conducted naval exercises near the Strait of Hormuz, the waterway through which almost 20 percent of the world’s oil flows, for 10 days ended early this month.
The Bank of France’s Business Sentiment Indicator (FRBSI) for manufacturers advanced to 96 in December from 95 in November, when it fell to the lowest since September 2009.
The country’s industrial production unexpectedly climbed 1.1 percent in November, lifted by electronics and refinery output, national statistics office Insee said today. Both numbers beat economists’ forecasts.
