Tuesday, January 31, 2012

Oil above $99 in Asia on Europe's austerity move (AP)

KUALA LUMPUR, Malaysia ? Oil rose above $99 a barrel Tuesday in Asia in sync with gains in regional equity markets after Europe took measures to battle its debt crisis.

Benchmark crude for February delivery was up 59 cents at $99.37 a barrel at midday Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract fell 78 cents to finish at $98.78 on Monday.

European leaders agreed Monday on a new treaty to stop overspending and put an end to the region's crippling debt woes. They also pledged to stimulate growth and employment amid fears of a looming recession. Greece and its bondholders are also inching closer to a deal to significantly cut the country's debt and pave the way for it to receive a much-needed euro130 billion ($170 billion) bailout.

"The announcements in the eurozone helped ease concerns but crude prices are going to be choppy going forward. The market is grappling with a weaker demand scenario and uncertainties in the supply side coming from Iran," said Natalie Robertson, commodities analyst at ANZ Banking Group in Melbourne.

Iran has welcomed international weapons experts into the country in hopes of refuting claims that it is building a nuclear weapon. That eased concerns about possible military action in the region.

Still, Europe plans to embargo Iranian oil this summer to pressure Iran about its nuclear program. If that happens, Iran says it could retaliate by blocking passage through the Persian Gulf, where tankers carry one-sixth of the world's oil exports.

The U.S. is ready to implement sanctions on Iran's central bank that will make it harder for Iran to sell oil. India has however, joined China in saying it will not cut back on crude imports from Iran.

In other energy trading, heating oil rose 2 cents to $3.06 per gallon and gasoline futures were down 0.5 cents to $2.87 per gallon. Natural gas fell 6 cents to $2.65 per 1,000 cubic feet.

Source: http://us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/ap/20120131/ap_on_re_as/oil_prices

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