Brent hits 8-month top above $121 after Iran, China moves

Brent hits 8-month top above $121 after Iran, China moves
8:13pm EST
By Florence Tan

SINGAPORE (Reuters) - Brent crude futures rose on Monday to above $121 a barrel, the highest in eight months, as Iran cut supply to Britain and France, while a policy easing by China and hopes for a Greek bailout also supported prices.

OPEC's second largest producer Iran ordered a halt to its oil sales to Britain and France on Sunday, retaliating against tightening EU sanctions as its ties with the West remained strained over its controversial nuclear programme.

Brent crude hit a session high of $121.15 per barrel, a level not seen since mid-June last year. It stood at $121.14 by 0054 GMT, up $1.56.

U.S. crude for March delivery rose $1.73 to $104.97 a barrel, after earlier rising to $105.21 a barrel, the highest since May last year.

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Brent hits 8-month top above $121 after Iran, China moves | Reuters

OPEC is right at $118.....

UP: 2011 West Texas Intermediate Crude Oil (WTI) Prices

WTI at 02/16/12 $102.31.

Its interesting that the difference is so high for so long. WTI and Brent have been showing a spread that is honestly ridiculous.

obvious Child said:

UP: 2011 West Texas Intermediate Crude Oil (WTI) Prices

WTI at 02/16/12 $102.31.

Its interesting that the difference is so high for so long. WTI and Brent have been showing a spread that is honestly ridiculous.

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Yep.. and Brent is ALWAYS higher than OPEC or West Texas crude.

sharon said:

Yep.. and Brent is ALWAYS higher than OPEC or West Texas crude.

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Yeah but generally not that much of a difference nor does it go on for this long.

obvious Child said:

Yeah but generally not that much of a difference nor does it go on for this long.

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My sense of it is that they are taking advantage of the politics and nerves.

Any gains we might have gained in our economy are about to dissapear if we continue on this track. Sabre rattling would seem to be more important than the economy to some.

sharon said:

My sense of it is that they are taking advantage of the politics and nerves.

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A 20% spread of, both handles, between the price of WTI and brent is a signal that the market believes the risk of a supply shock is quite high.

Kushinator said:

A 20% spread of, both handles, between the price of WTI and brent is a signal that the market believes the risk of a supply shock is quite high.

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I agree with you.............

It's gonna hit the roof with Iran using oil as a weapon.

RDS said:

It's gonna hit the roof with Iran using oil as a weapon.

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Seems to me: If Iran continues to try to use oil as a weapon, Iran will lose. Big time.

Yes, the world may see some short-term discomfort from higher crude prices, but it won't last long. Other global considerations notwithstanding, it's one thing for the cartel to try to keep prices high, but not so high as to cause economic dislocations/recessions. It is quite another for a single country to try to use oil in contravention of the cartel's goals.

RDS said:

It's gonna hit the roof with Iran using oil as a weapon.

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Iranian production is pretty small and half of that goes to domestic consumption.. I don't think their oil is really the problem..

But the reperpercussions of an attack on Iran is a game changer.

Let's not forget that the Iranians are having an election soon, March 2nd, is it? Some see these elections representing a showdown between Khamenei and Ahmadinejad (see StrategyPage, for example). But mainly, the issue within the country is the economy, with the government now resorting to barter in its effort to evade sanctions.

As one observer wrote,

Neither side can afford to seem weak on the West, but whoever wins the struggle will face a dire economic situation, and the only way to relieve it is to find markets for Iranian oil and thus to reduce the global temperature.

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Persisting in belligerence does not seem to be in their best interests. But do they know that?

oldreliable67 said:

Let's not forget that the Iranians are having an election soon, March 2nd, is it? Some see these elections representing a showdown between Khamenei and Ahmadinejad (see StrategyPage, for example). But mainly, the issue within the country is the economy, with the government now resorting to barter in its effort to evade sanctions.

As one observer wrote,



Persisting in belligerence does not seem to be in their best interests. But do they know that?

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The people would probably know that.

There have been rumors of a coup for months.

Sadly, I doubt any election could shake control away frm the clerics.

sharon said:

The people would probably know that.

There have been rumors of a coup for months.

Sadly, I doubt any election could shake control away frm the clerics.

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The people, yes. The leadership, I wonder.

The clerics exercise too much control to lose it via an election (absent a quite significant uprising).