Europe worries ease

Oil rebounds as Nigeria output at risk

GMT 08:02 2012 Friday ,13 January

Arab Today, arab today Oil rebounds as Nigeria output at risk

A sign that reads "Diesel is available" is hung at the entrance of a closed fuel station on the fourth day of a nationwide strike  
New York - Arabstoday  

A sign that reads "Diesel is available" is hung at the entrance of a closed fuel station on the fourth day of a nationwide strike   New York - Arabstoday   Oil rebounded after Nigeria's main oil union threatened to shut output and as the euro rallied, thanks largely to solid debt auctions by Spain and Italy. Nigeria's main oil union, PENGASSAN, threatened to shut output from Sunday as Africa's biggest oil producer entered its fourth day of nationwide protests over the loss of fuel subsidies. Industry officials expressed doubts that union action would stop oil exports completely.
Successful debt auctions by Spain and Italy and European Central Bank President Mario Draghi's assurance that the ECB was ready to act if needed fueled the euro rally, prompting investors to buy oil and other riskier assets.
"The euro's rise against the dollar on successful Spanish and Italian debt auctions plus the threat of a shutdown in Nigerian production lifted crude futures," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
By 1:30 p.m. EST (1830 GMT) , ICE Brent crude for February delivery traded in London at $113.42, up $1.18. It struck a session high of $115.12, highest for front-month Brent since Nov. 9. US February crude oil was up 87 cents at $101.74, after having hit a session high of $102.98.
Brent's premium against U.S. crude rose slightly to around $11.70, after closing at $11.37 on Wednesday.
Brent trading volume rose nearly 14 percent above its 30-day average while US volume was down almost 14 percent, according to Reuters data.
Oil futures fell about 1 percent on Wednesday on an unexpectedly big increase in US crude stockpiles and on worries about the euro zone debt crisis.
Oil prices have been on the rise for weeks due to Iran's threat to shut down the vital Strait of Hormuz oil shipping lane in response to sanctions against it for its nuclear ambitions. Tensions between Iran and the West reached a new height on Wednesday, when an Iranian nuclear scientist was killed in a car bomb, an incident Iran blames on Israeli and US agents.
The White House has denied any involvement.
US allies in Asia and Europe said they would support Washington's campaign to cut Iran's oil exports. However, fear of self-inflicted economic pain is tempering enthusiasm for such an action..
Late on Wednesday, the US military said a new aircraft carrier strike group had arrived in the Arabian Sea, with another on the way to the region. But officials denied any link to Iran tensions with the West.
"The oil complex is still being supported by a plethora of geopolical risks that are continuing to evolve around the world with Iran at the top of the list," said Domninick Chirichella, senior partner at Energy Management Institute in New York.
US economic data showed retail sales in December rose at the weakest pace in seven months, while first-time claims for jobless benefits increased, tempering oil's rebound.
A forecast from UK consultancy Oil Movements that seaborne OPEC exports would increased by 420,000 barrels per day in the four weeks to Jan. 28 also helped cap the day's gains.

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