Brent Crude Tops $120 a Barrel on Iran Supply Concerns - CNBC
Brent crude topped $120 a barrel on Thursday, on supply concerns over Iran and an expected drop in North Sea output.
Brent crude [ LCOCV1 119.90 
+0.97 (+0.82%) ] gained after dipping earlier in the day and was up by $1.08 cents at $120.01 a barrel. On Wednesday, it hit a session peak of $119.99, the highest intraday price since August, and settled at $118.93, the highest settlement since June.
In euro terms, Brent prices were at the highest level since 2008, according to Reuters data.
U.S. light, sweet crude [ CLCV1 102.34 +0.54 (+0.53%) ] was trading up 59 cents at $102.39. It pared its earlier losses due to the healthy reading of U.S. jobs data.
Iran, the world's fifth-largest oil exporter, proposed an early resumption of long-stalled nuclear talks with world powers, according to a letter from Tehran to European Union policy chief Catherine Ashton obtained by Reuters on Thursday.
"The European consumer is currently getting the double hit of Iran trying to do its most to support Brent prices and Greece continuing to pressure the euro/dollar," Olivier Jakob with Petromatrix said. "In euros per barrel, Brent has been higher only one day in its history: July 3rd, 2008."
Iran's ambassador to Russia said on Thursday plans to cut off supplies of Iranian crude to Europe would benefit only the Islamic republic, which in the past has been heavily dependent on imported fuel due to restricted refining capacity.
But its oil ministry denied an Iranian state television report on Wednesday that the country was halting its crude exports to six European countries before the EU ban on Iranian crude becomes effective later this year.
Meanwhile, the number of Americans filing jobless claims unexpectedly fell last week to a near four-year low, suggesting the labor market recovery was gaining traction.
Other government data on Thursday also pointed to sustained momentum in the economy, with housing starts rising more than expected in January and little signs of a pick-up in inflation pressures.
Global markets were mixed as a delay in a decision on a crucial bailout for Greece unnerved investors and prompted a pause in the market rally that has marked the start of 2012.
The euro [ EUR= 1.3104 +0.0038 (+0.29%) ] eased against the dollar. The FTSEurofirst index of top European companies opened down. After losses in Asia, the MSCI world equity index was also lower.
Prompt April Brent rose to a premium of above $1 a barrel over the May contract briefly, a market structure known as backwardation , reflecting the lower expectations for North Sea output in March.
Meanwhile, the premium of Brent over U.S. crude rose above $17 a barrel as crude stocks held at Cushing, Okla., delivery hub for U.S. crude increased to their highest level since September.
The stocks at Cushing posted a 2 million barrel build, the biggest weekly increase since December 2009, while the overall U.S. crude inventories fell modestly last week, the latest U.S. government data showed on Wednesday.
Natural Gas Jumps After EIA Report
Front-month U.S. natural gas futures extended gains early Thursday after a government report showed a slightly larger-than-expected weekly inventory draw.
The U.S. Energy Information Administration report showed total domestic gas inventories fell last week by 127 billion cubic feet to 2.761 trillion cubic feet. Traders and analysts polled by Reuters had expected a 120-bcf decline.
The NYMEX front-month gas futures contract climbed 11.3 cents, or 4.7 percent, to an intraday high of $2.553 per million British thermal units. The contract had traded as low as $2.415 prior to the report.
Just before the release of the weekly storage data at 10:30 a.m., the front month was trading in the $2.465 area.
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