×
NewsDay

AMH is an independent media house free from political ties or outside influence. We have four newspapers: The Zimbabwe Independent, a business weekly published every Friday, The Standard, a weekly published every Sunday, and Southern and NewsDay, our daily newspapers. Each has an online edition.

Brent oil holds near $123 as Iran offsets economy

News
SINGAPORE Brent crude held steady yesterday near a nine-month high of about $123, as supply worries caused by heightened tension between Iran and the West offset concern that a slowdown in the global economy could curb oil demand. United Nations inspectors sent to visit the countrys nuclear installations declared their mission a failure, a setback […]

SINGAPORE Brent crude held steady yesterday near a nine-month high of about $123, as supply worries caused by heightened tension between Iran and the West offset concern that a slowdown in the global economy could curb oil demand.

United Nations inspectors sent to visit the countrys nuclear installations declared their mission a failure, a setback likely to increase the risk of confrontation with the West.

A larger-than-expected build in crude stockpiles in the United States following weak economic data from China and Europe depressed US crude futures.

Brent crude for April delivery fell 18 cents to $122,72 by 0502GMT after it rose on Wednesday for a third day to settle at $122,90, the highest in nine months.

US crude futures for April were down 37 cents to $105,91 after settling at a nine-month high of $106,28 a barrel the previous day.

Any further news of escalating tensions in Iran or other Middle East or African countries will likely increase the risk premium, although our short-term view could be prices could dip today on profit-taking as prices reach overbought territory, said Natalie Robertson, a commodity strategist at ANZ bank.

Brents risk premium has risen closer to $15 a barrel from $5 to $10 previously, after top Iranian crude buyers China and India planned to reduce imports from the Islamic Republic, Robertson said.

Japan could cut Iranian imports by as much as 20% or more this year, a local newspaper reported, following reductions planned by other buyers in Asia and Europe as Western sanctions made trade difficult.

Front-month Brent futures have risen about 9% from the start of the year as geopolitical and production issues in Iran, the North Sea, South Sudan, Syria and Yemen tightened supplies.

Goldman Sachs expects the spread between September US crude and Brent futures to narrow to $5 a barrel in six months following the scheduled June reversal of the Seaway pipeline to flow crude oil from Cushing to the US Gulf Coast.

WTI (West Texas Intermediate) prices will be closely tied to Brent prices, with WTI likely trading at a $3-$5 a barrel discount, reflecting the pipeline tariff economics, analysts at the bank wrote in a February 22 note.

Front-month Brent crudes premium against US crude was near $17 yesterday after widening to close to $21 on February 7 as inventories at Cushing, Oklahoma, the delivery point for WTI, rose.