Brent potentially has more to the upside due to supply-side risks markets drivers

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Brent potentially has more to the upside due to supply-side risks markets drivers
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Oil may rise next week on concern that shipments will be disrupted by tension between Iran and the West over the country’s nuclear program, a Bloomberg News survey showed. Fifteen of 37 analysts, or 41 percent, forecast oil will climb through Feb. 24. Twelve respondents, or 32 percent, predicted prices will decline and 10 estimated there will be little change.

“The main driver of the market is Brent, which potentially has more lift to the upside due to supply-side risks,” said Emori. Daily volumes in options granting the right to buy Brent for more than the current market price have risen above 25,000 on four days during the past two weeks in New York, signaling an increase in bets on a possible price rally.

Threats From Iran

Iran said Feb. 15 it was cutting crude shipments to France and the Netherlands, and had loaded locally built fuel plates into its nuclear research reactor in Tehran, according to reports by the state-run Mehr news agency and Press TV. The EU decided last month to halt purchases from Iran starting July 1 in an attempt to halt its nuclear program.

Iran will increase the volume of oil it ships to China “soon,” state-run Mehr news agency reported yesterday, citing an unidentified official at National Iranian Oil Co.

In the U.S., applications for unemployment payments dropped by 13,000 in the week ended Feb. 11 to 348,000, the Labor Department said yesterday. The claims were less than the most- optimistic estimate of 45 economists surveyed by Bloomberg News.

Progress in Greece

Greece expects euro area finance ministers to approve a second aid package at a meeting on Feb. 20, according to Pantelis Kapsis, a government spokesman. Overcoming the final obstacles may enable finance ministers to approve the 130 billion-euro ($170 billion) lifeline and a bond exchange with private investors that are critical to staving off a Greek default in March, the German finance ministry told coalition lawmakers in Berlin yesterday, three officials said.

Oil prices are rising on demand from Asian countries, including China, the world’s second biggest crude consumer, according to HSBC Holdings Plc.

“Most blame geopolitics for the latest spike, and we don’t quibble with that,” Frederic Neumann, co-head for Asian economic research at the bank in Hong Kong, said in a report today. “But fundamentally, Asia’s huge appetite for crude is providing the backdrop.”

China’s crude imports increased 7.4 percent from a year ago to 23.41 million metric tons in January, a record high, according to preliminary data from Beijing-based General Administration of Customs on Feb. 10. Final figures are scheduled to be released on Feb. 21.

“As prices continue to climb, a number of economies, such as India, Korea and Thailand, could feel the pinch,” Neumann said. “While waiting out this Greece thing, keep an eye on oil.”

Saudi Arabian Oil Co. plans to re-open the Damman oilfield, the company’s oldest, and produce there for the first time in 30 years in response to “tight market conditions,” the Economist Intelligence Unit reported yesterday. Officials at Aramco’s headquarters in Dhahran, Saudi Arabia, didn’t answer phone calls seeking comment.....READ MORE