Forexpros – Crude oil futures rose for the first time in four days on Tuesday, climbing to a two-day high as weakness in the U.S. dollar and concerns over a disruption supplies from Iran boosted prices.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD97.44 a barrel during European morning trade, gaining 0.54%.
It earlier rose by as much as 0.85% to trade at a two-day high of USD97.95 a barrel.
Crude’s gains came as the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, declined 0.1% to trade at 78.39.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Appetite for riskier assets improved after ratings agency Fitch said the failure of a U.S. congressional “super committee” to agree on a package of measures to slash the U.S. deficit over the next 10 years was likely to lead to a revision of the rating outlook to Negative, rather than a downgrade.
Crude prices found further support after the U.S., the U.K. and Canada announced new sanctions on Iran’s energy and financial sectors, less than two weeks after a United Nations report published evidence that the Iranian government was working on a nuclear weapon.
U.S. Treasury Timothy Geithner said in a press conference Monday that, “Any institution or company in the world that engages in transactions with Iran’s banking system is at risk of supporting Iran’s illicit activities: its pursuit of nuclear weapons and its support for terrorism.”
Meanwhile, France has urged the European Union and other nations to immediately freeze the assets of Iran’s central bank and to suspend purchases of Iranian oil.
Iran is the world’s fourth largest crude oil producer and the second biggest exporter among OPEC members. The country produces approximately 3.7 million barrels of oil a day.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery rose 0.52% to trade at USD107.44 a barrel, with the spread between the Brent and crude contracts standing at USD10.00 a barrel.
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