Renewed European hope, tensions in Iran propel global oil investments
Crude oil posted increases today, rising for a second consecutive session on the New York commodity index, as Europe announced another series of steps to curb its spiralling debt crisis. The continent’s extended struggle with its debt has been a major deterring factor for global economic growth and raw commodity demand throughout the year, causing several sharp falls in oil investments and metal futures.
The oil commodity futures rose as much as 0.8%, reporting a first five-day long surge in three weeks. The upcoming meeting between the U.S. Treasury Secretary Tim Geithner and the leaders of the E.U. are expected to play a crucial role in pulling Europe out of its financial slump. With the economy in the U.S. steadily improving, traders are hoping that the nation’s involvement will trigger a bout of relief in the addled euro zone. Oil investments also saw some support when Italian Prime Minister Mario Monti announced more than 30 billion euros in new austerity and growth policies.
Officials in Iran issued threats that if the sanctions imposed on the nation are not lifted, global crude futures will soar as high as $250 per barrel, crippling the economies of Europe and Asia.
U.S. benchmark crude for delivery in January gained 77 cents to $101.73 per barrel in electronic trading on the New York Mercantile Exchange. Futures rose as high as 4.3% over the past week and are up 13% for the year overall.
Brent crude oil prices for January settlement gained 71 cents and settled at $110.65 per barrel on the ICE Futures Exchange in London. Oil investments in the European contract have benefited significantly from the continuing tensions surrounding Iran and its nuclear program. The spread between Brent and West Texas Intermediate crude now stands at a little less than $10 per barrel.
More than 180 Iranian officials and firms were blacklisted in Europe over the past seven days, as the West continued to try and pressure the OPEC nation to abandon its nuclear ambitions.