Forexpros – Crude oil futures broke the psychologically critical USD100.00 per barrel level Tuesday on Iranian supply fears and Chinese economic numbers.
On the New York Mercantile Exchange, light sweet crude futures for February settlement traded at USD100.70 a barrel during mid U.S. trade adding 1.84%.
It earlier climbed to USD101.19 adding 2.2% to trade at the highest level since last Thursday.
Weakness in the U.S. dollar helped lift crude oil prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.40% to trade at 81.33.
Dollar weakness generally lifts commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.
According to European Union sources France is pushing to ramp up enforcement of the EU’s proposed Iranian embargo. Euro zone finance ministers are scheduled to meet on January 23rd to decide on the embargo in Brussels.
Earlier, Iran countered by issuing strong warnings that any disruption of supply in the Strait of Hormuz would result in major worldwide issues. Iran is the world’s fourth largest producer of oil hence when embargo rhetoric increases supply concerns lift prices.
Meanwhile, government data indicated that China’s economy grew at the slowest pace in over 2 years adding to speculation that Beijing was likely to ease monetary policy to stimulate growth.
Other data from Germany indicated the ZEW investor confidence index surged the most on record. The numbers jumped from minus 21.6 to minus 53.8 in December, the largest gain since the index began in December, 1991helping to fuel the bullish crude oil advance.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery fell 0.19% to trade at USD111.13 a barrel, up USD10.43 on its U.S. Counterpart.
This greater than USD10.00 spread is near historic highs. The two contracts traditionally trade within USD1.00 of each other.
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