Brent above $110 on Iran tensions
Brent crude climbed above $110 a barrel this morning, recovering from a more than 1 per cent drop in the previous session, as escalating tensions surrounding Iran offset concerns about weak demand in a still-fragile global economy.
Washington yesterday tightened sanctions against Iran to curb its nuclear ambitions, while Tehran increased its rhetoric against Israel, intensifying worries about the conflict between the two and the impact on crude supplies from the region.
"The markets have been flip-flopping between worries over weak demand and tight supplies, so I'm not surprised to see some volatility in prices," said Natalie Rampono, commodity strategist with ANZ in Melbourne.
November Brent futures rose 34 cents to $110.15 per barrel at 02.48 GMT, while US crude futures gained 39 cents to $92.32 a barrel.
Both contracts shed more than $1 yesterday as weak German economic data underlined demand worries.
While the underlying sentiment remains weak as investors fret about the effectiveness of the recently announced stimulus measures and the impact on global oil demand, the focus this morning was on the increasing tensions in the Middle East.