Bekins


Sponsored By:

   The Nation  |  Business  |  Equipment  |  Features


Oil below $99 amid growth worries, Iran tensions

Asian countries, already Iran's biggest customers, aren't joining the Europeans in banning Iranian crude. The move has been harshly criticized by oil-ravenous China, which is believed likely to sop up any excess Iranian crude at advantageous prices.

The Associated Press

1/25/2012

LONDON — Oil prices hovered below $99 a barrel Wednesday amid worries about economic growth and tensions over Iran, which Western nations are boycotting over a suspected nuclear weapons program.

Crude prices tracked financial markets lower on Wednesday on concerns about growth, mainly in Europe. Although some countries like Germany are proving resilient to the impact of the euro's debt crisis, others are expected to slide into recession. The latest data show the U.K. economy contracted more than expected in the fourth quarter.

Benchmark crude for March delivery was down 67 cents to $98.28 per barrel by midday European time in electronic trading on the New York Mercantile Exchange. The contract fell 63 cents to end at $98.95 in New York on Tuesday.

____________________________________________________________________________________________________________________

ADVERTISEMENT

THE RECENT INCREASE IN FREIGHT VOLUME MEANS NEW JOB OPPORTUNITIES ON GOTRUCKERS.COM. CLICK HERE FOR MORE DETAILS.

_____________________________________________________________________________________________________________________

Brent crude for March delivery was down 40 cents at $109.63 a barrel on the ICE Futures Exchange in London.

Price drops were limited, however, by ongoing tensions over Iran and an international effort to pressure it to drop its nuclear program.

Australian Foreign Minister Kevin Rudd announced Tuesday that his government had decided to follow the European Union in banning imports of Iranian crude starting.

The initiative to use oil to force Iran back to nuclear talks began last month, when the U.S. enacted new sanctions targeting Iran's central bank and its ability to sell petroleum abroad. The U.S. doesn't buy Iranian oil, but the new sanctions make it harder for Iran to sell crude.

Asian countries, already Iran's biggest customers, aren't joining the Europeans in banning Iranian crude. The move has been harshly criticized by oil-ravenous China, which is believed likely to sop up any excess Iranian crude at advantageous prices.

Meanwhile, analysts said that oil prices, amid expectations of tightening supplies, would remain somewhat elevated until the dust settles.

"There are other nations that will be boycotting Iran. That is probably adjusting market expectations of tighter supplies," said Natalie Robertson, a commodities analyst with ANZ Banking Group in Melbourne.

"There is going to be a rebalancing. Iran will have to find new customers for its crude since its usual customers are cutting down imports. During that period, there is going to be some time while the market adjusts to the imbalances, and that is what is keeping prices supported."

In other energy trading, heating oil fell 0.4 cent to $3.02 per gallon and gasoline futures were down 0.6 cent at $2.79 per gallon. Natural gas rose 7.6 cents to $2.63 per 1,000 cubic feet.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

Find more news and analysis from The Trucker, and share your thoughts, on Facebook.

Amer. Truckers Legal