Iranian unrest has helped propel crude to a five-week high above US$79 per barrel
Crude rallies on Iran unrest
Iranian unrest has helped propel crude to a five-week high above US$79 per barrel, extending a rally that also gained momentum from encouraging economic signs and falling northern hemisphere temperatures. Crude touched $79.01 earlier today in electronic trading on the New York Mercantile Exchange, as Tehran continued efforts to suppress opposition protests that have killed at least eight people in clashes with security forces. The violence was confined to cities far from the main oil producing regions of Iran, which is the second largest OPEC oil exporter, but investors worried that the situation could escalate.
"The tension in Iran is reintroducing an element of geopolitical risk into the oil price," Christopher Bellew, a senior broker at Bache Commodities in London, told Bloomberg. Russia briefly added to the market's geopolitical jitters by warning that it might cut some oil supplies to Europe due to a dispute with Ukraine over transit fees, just as it opened a new eastbound oil pipeline to China. The spat was quickly resolved, however, when Moscow agreed to increase by 30 per cent the fee it pays to transport oil across Ukraine.
Adding to the oil market's bullish mood, analysts predicted a fourth consecutive weekly decline in US oil stocks, as a new wave of cold weather boosted demand for heating oil. email@example.com