Forexpros – Crude oil futures trimmed gains on Tuesday, easing off a three-day high amid renewed concerns over the U.S. economic outlook, but mounting concerns over a disruption to supplies from Iran and South Sudan underpinned prices.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD100.47 a barrel during U.S. morning trade, jumping 1.75%.
It earlier rose by as much 2.25% to trade at USD101.28 a barrel, the highest since January 26.
Crude prices came off their highs after data showed that U.S. consumer confidence deteriorated unexpectedly in January.
A separate report showed that manufacturing activity in the Chicago area declined unexpectedly in January, falling to the lowest level since August.
Also Tuesday, the S&P/Case-Shiller home price index for November fell more-than-expected, declining for the 17th consecutive month.
Meanwhile, investors remained wary amid uncertainty over Portugal’s debt burden, as the yield on the country’s 10-year government bonds remained close to Monday’s euro-era highs at 18%, fuelling concerns that Lisbon may need a debt restructuring deal.
Prices were well supported earlier as hopes for an imminent agreement on a debt restructuring deal for Greece saw market sentiment improve. An agreement is necessary for Greece to secure the next tranche of bailout funds in order to prevent a sovereign debt default.
Meanwhile, oil traders continued to eye tensions between Iran and the West. Lawmakers on the U.S. Senate Banking Committee plan to vote on a new round of sanctions targeting Iran’s energy sector.
Last week, the European Union agreed to ban oil imports from Iran starting July 1 to pressure the Persian Gulf nation over its nuclear program.
Iran is the world’s fourth largest oil producer, pumping nearly 5% of the world’s oil in 2010. The threat of a major supply disruption from the country has helped support oil prices in recent weeks.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery rallied 1.35% to trade at USD112.25 a barrel, with the spread between the Brent and crude contracts standing at USD11.78 a barrel.
Brent prices were boosted after South Sudan’s oil minister said Monday that the country has totally shut down oil output in response to a conflict with Sudan over export transit fees. The country produces approximately 350,000 barrels of oil per day.
South Sudan seceded from Sudan in July under a 2005 peace deal that ended decades of civil war, but the two countries have remained at odds over issues including oil, debt and fighting along the poorly drawn border.
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