Oil headed for the biggest weekly decline in four in New York after a proposed European Union embargo of Iranian crude imports against the nation’s nuclear program was said to be facing a delay of six months.
Futures were little changed after sliding the most in two weeks yesterday to the lowest settlement this year. The embargo postponement will allow countries such as Greece, Italy and Spain to find alternative supplies, according to an EU official with knowledge of the talks. Oil also fell after a report showed U.S. retail sales rose less than forecast in December, signaling an economic slowdown in the world’s biggest crude consumer.
“Oil is probably moving downward to $95 to $90 in the short-term” after news of the delay, said Tetsu Emori, a commodity fund manager at Astmax Ltd. in Tokyo. An embargo will be hard to put in place “as it is quite difficult for countries to shift and find alternatives even from other Middle Eastern countries,” he said.
Crude for February delivery was at $99.48 a barrel, up 38 cents, in electronic trading on the New York Mercantile Exchange at 12:55 p.m. Sydney time. The contract yesterday fell $1.77, or 1.8 percent, to $99.10, the lowest close since Dec. 30. Prices are down 2 percent this week, the biggest decline since the period ended Dec. 16, and up 0.7 percent this year.
Brent oil for February settlement rose 15 cents to $111.41 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $11.93, compared with a record $27.88 on Oct. 14.
Sanctions Talks
Oil in New York traded above $100 a barrel every day this year before today, amid Iranian threats to respond to sanctions by shutting the Strait of Hormuz, a transit route for a fifth of the world’s crude. It rose to $103.74, the highest intraday price in almost eight months, on Jan. 4 after the EU said foreign ministers intend to announce harsher sanctions on Iran’s energy and banking industries at their next meeting.
Phasing in the European embargo would satisfy the concerns of countries most dependent on Iranian oil, including Italy, Greece and Spain, the EU official said, declining to be identified because the talks are private. Those three nations accounted for 68.5 percent of EU imports from Iran in 2010, according to European Commission data.
Sanctions, which would need to be agreed on by the foreign ministers of the 27-nation bloc on Jan. 23, are also likely to include an exemption for Italy so crude can be sold to pay off debts to Rome-based Eni SpA (ENI), the nation’s largest oil company, according to the official. A ban on petrochemical products would start sooner, the official said.
U.S. Slowdown
Sales at U.S. retailers rose 0.1 percent last month after a 0.4 percent increase in November, according to figures from the Commerce Department yesterday in Washington. The median estimate in a Bloomberg News survey called for a 0.3 percent rise. Jobless claims climbed more than expected to 399,000 in the week ended Jan. 7, Labor Department figures also showed.
Crude shipments from OPEC will reach the highest level in almost a year amid rising exports from Libya, according to tanker-tracker Oil Movements. The Organization of Petroleum Exporting Countries will export 23.66 million barrels a day in the four weeks to Jan. 28, the most since Feb. 12, 2011, the Halifax, England-based researcher said yesterday in an e-mailed report. The figures exclude Angola and Ecuador.
Nigerian labor unions said yesterday they will continue a strike that threatens oil exports from Africa’s top producer because no agreement has been reached yet with President Goodluck Jonathan on restoring fuel subsidies. The unions plan to resume talks with the president tomorrow, Abdulwaheed Omar, president of the Nigeria Labour Congress, told reporters at a press conference in the capital Abuja.
The oil union Pengassan said it would begin shutting down oil output on Jan. 15 if there was no agreement with the government, while its counterpart Nupeng said it has withdrawn its workers from fields operated by companies such as Royal Dutch Shell Plc (RDSA) to back the strike.
Futures were little changed after sliding the most in two weeks yesterday to the lowest settlement this year. The embargo postponement will allow countries such as Greece, Italy and Spain to find alternative supplies, according to an EU official with knowledge of the talks. Oil also fell after a report showed U.S. retail sales rose less than forecast in December, signaling an economic slowdown in the world’s biggest crude consumer.
“Oil is probably moving downward to $95 to $90 in the short-term” after news of the delay, said Tetsu Emori, a commodity fund manager at Astmax Ltd. in Tokyo. An embargo will be hard to put in place “as it is quite difficult for countries to shift and find alternatives even from other Middle Eastern countries,” he said.
Crude for February delivery was at $99.48 a barrel, up 38 cents, in electronic trading on the New York Mercantile Exchange at 12:55 p.m. Sydney time. The contract yesterday fell $1.77, or 1.8 percent, to $99.10, the lowest close since Dec. 30. Prices are down 2 percent this week, the biggest decline since the period ended Dec. 16, and up 0.7 percent this year.
Brent oil for February settlement rose 15 cents to $111.41 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $11.93, compared with a record $27.88 on Oct. 14.
Sanctions Talks
Oil in New York traded above $100 a barrel every day this year before today, amid Iranian threats to respond to sanctions by shutting the Strait of Hormuz, a transit route for a fifth of the world’s crude. It rose to $103.74, the highest intraday price in almost eight months, on Jan. 4 after the EU said foreign ministers intend to announce harsher sanctions on Iran’s energy and banking industries at their next meeting.
Phasing in the European embargo would satisfy the concerns of countries most dependent on Iranian oil, including Italy, Greece and Spain, the EU official said, declining to be identified because the talks are private. Those three nations accounted for 68.5 percent of EU imports from Iran in 2010, according to European Commission data.
Sanctions, which would need to be agreed on by the foreign ministers of the 27-nation bloc on Jan. 23, are also likely to include an exemption for Italy so crude can be sold to pay off debts to Rome-based Eni SpA (ENI), the nation’s largest oil company, according to the official. A ban on petrochemical products would start sooner, the official said.
U.S. Slowdown
Sales at U.S. retailers rose 0.1 percent last month after a 0.4 percent increase in November, according to figures from the Commerce Department yesterday in Washington. The median estimate in a Bloomberg News survey called for a 0.3 percent rise. Jobless claims climbed more than expected to 399,000 in the week ended Jan. 7, Labor Department figures also showed.
Crude shipments from OPEC will reach the highest level in almost a year amid rising exports from Libya, according to tanker-tracker Oil Movements. The Organization of Petroleum Exporting Countries will export 23.66 million barrels a day in the four weeks to Jan. 28, the most since Feb. 12, 2011, the Halifax, England-based researcher said yesterday in an e-mailed report. The figures exclude Angola and Ecuador.
Nigerian labor unions said yesterday they will continue a strike that threatens oil exports from Africa’s top producer because no agreement has been reached yet with President Goodluck Jonathan on restoring fuel subsidies. The unions plan to resume talks with the president tomorrow, Abdulwaheed Omar, president of the Nigeria Labour Congress, told reporters at a press conference in the capital Abuja.
The oil union Pengassan said it would begin shutting down oil output on Jan. 15 if there was no agreement with the government, while its counterpart Nupeng said it has withdrawn its workers from fields operated by companies such as Royal Dutch Shell Plc (RDSA) to back the strike.
