Fin24

US data, Iran fears send oil higher

2012-01-10 07:50

Singapore - Oil prices rose in Asian trade on Tuesday with buoyant US consumer data and heightened worries over Iran's nuclear programme providing support, analysts said.

New York's main contract, West Texas Intermediate crude for delivery in February, was up 28 cents to $101.59 a barrel.

Brent North Sea crude for February gained 15c to $112.60.

"US consumer economic data saw its biggest jump in a decade, signalling increased confidence in its economic recovery," said Nick Trevethan, senior commodities strategist at ANZ Research.

Data out of Washington on Monday showed a 9.9% surge in consumer credit in November, the biggest increase since 2001.

Credit card spending was up 8.5%, while non-revolving loans, including university and automobile loans, jumped 107%.

It added to the growing sense that a recovery in the world's biggest economy and oil consumer is showing signs of strength, coming days after a fall in the unemployment rate and a bigger-than-forecast rise in job creation.

Adding to the upward pressure on oil is lingering concern about Iran's nuclear programme, Trevethan said.

The UN atomic agency on Monday disclosed that Tehran had started to enrich uranium in a mountain bunker, stoking suspicions that it wants to build nuclear weapons.

Iran - the world's fourth-largest oil producer - has threatened to close the strategic Strait of Hormuz if the European Union goes ahead with plans to slap a ban on imports of its oil as part of sanctions to stop its nuclear programme.

"Iran’s external relations can affect oil markets through more than just the blockage of trade," Barclays Capital said in a commentary.

"In our view, the situation is now severe enough to run the danger of creating a clash almost accidentally."

Meanwhile traders are also monitoring the situation in Nigeria, where the end of fuel subsidies has sparked widespread protests, analysts said, although officials said oil output in the country had so far been unaffected.

Nigeria produces about 2.4 million barrels a day and is Africa's top producer.