Oil prices rose on Monday as the market reacted to potential supply disruptions in Nigeria and Iran, while keeping a watch over fresh eurozone strains after last week’s ratings downgrades, analysts said.
New York’s main contract, West Texas Intermediate crude for delivery in February, gained 96 cents to $99.66 a barrel.
Brent North Sea crude for February climbed 70 cents to $111.14 in late London deals.
“Choppy trading is here to stay at the start of the week with all attention on the eurozone and developments in Nigeria,” said Andrey Kryuchenkov, an analyst at Russian financial group VTB Capital.
Commerzbank analyst Eugen Weinberg said “the war of words between Iran and the West is likely to keep the risk premium on the oil price at a high level.”
In Africa’s biggest oil producer Nigeria on Monday, soldiers seized protest sites and dispersed demonstrators after its president watered down a hike in petrol (gasoline) prices to help end an eight-day nationwide strike.
Meanwhile, Iran has starkly warned Gulf states not to make up for any shortfall if its oil exports are cut as a result of new US and EU sanctions.
If Arab neighbours compensate for a looming EU ban on Iranian imports, “we would not consider these actions to be friendly,” Iran’s representative to OPEC, Mohammad Ali Khatibi, said in remarks published on Sunday.
“They will be held responsible for what happens” in that case, he said, adding: “One cannot predict the consequences.”
The United States and allied nations accuse Iran of developing an atomic bomb but Tehran insists its nuclear programme is exclusively for peaceful, civilian use.
Elsewhere on Monday, the OPEC oil cartel raised marginally its 2012 forecast for growth in global oil demand but warned of “a great amount of uncertainty” amid economic instability, especially in the eurozone.
“Oil demand will grow in 2012 but not without a great amount of uncertainty,” the Organization of Petroleum Exporting Countries said in a regular monthly report.
Demand for 2012 was forecast at 88.9 million barrels per day, up slightly from its previous estimate of 88.87 million bpd.
The ongoing eurozone debt crisis remained the biggest threat to the global economy and, as a result, to the oil market, the report said.
“So far it has had little impact on market fundamentals in other regions. However, if the situation were to worsen, the effect on the oil market could be seen not only through a further decline in oil demand in Europe but also with spillover effects on oil demand in the emerging economies,” OPEC warned.
Traders are closely watching the situation in the eurozone after Standard and Poor’s downgraded its ratings on nine member states, stoking concerns over the future of the euro and the wider economic outlook.
S&P said it downgraded France’s top AAA rating by one notch to AA+, with a negative outlook, but left European powerhouse Germany unchanged at AAA, reflecting its stronger economy and finances.
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