STOCK MARKET WATCH - Wednesday, 11 January 2012

[Demeter]

48. Oil Trades Near a One-Week High as Iran Tension Counters European Economy

http://www.bloomberg.com/news/2012-01-10/oil-trades-near-one-week-high-on-iran-sanctions-tension-economic-optimism.html

Oil traded near the highest settlement in almost a week as concern that supplies from Iran will be disrupted countered speculation Europe may enter a recession as it struggles to tame its debt crisis.Oil pared losses of as much as 0.6 percent after Iran’s Fars news agency said a nuclear scientist was killed in a bomb attack in Tehran. U.S. Treasury Secretary Timothy F. Geithner is visiting China and Japan as he seeks support for sanctions against Iran’s nuclear program. The Persian Gulf nation has threatened to shut the Strait of Hormuz if its oil exports are blocked. Germany’s economic growth slowed last year and Spanish factory output shrank the most since 2009, reports today showed.

“Tensions over Iran have contributed a risk premium of about $4 to $5 a barrel,” said Victor Shum, a senior principal at Purvin & Gertz Inc., an industry consultant in Singapore. “Europe’s economic outlook is certainly not robust. That’s taken into account in the oil price.”

Crude for February delivery was at $102.25 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange at 4:06 p.m. Singapore time. The contract yesterday climbed 0.9 percent to $102.24, the highest close since Jan. 4. Prices are up 3.5 percent this year. Brent oil for February settlement rose 18 cents to $113.46 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $11.21, compared with $11.04 yesterday and a record $27.88 on Oct. 14.