OIL & GAS MARKET WRAP

The Oil and Gas wrap provides the latest oil prices from commodity exchanges in New York and London, gives a summary of the main corporate and macroeconomic news impacting the price of oil, a barometer of the strength of global economy.

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Wednesday, February 15, 2012

Oil climbs on supply concerns

Oil climbs on supply concerns

Oil prices rallied this afternoon after Iran made good on threats to cut off oil supplies to Europe in response to an embargo imposed by the EU last month.

Iranian media today reported that the Middle Eastern country, which is accused of illegally developing a nuclear weapon, has stopped shipping crude to six European countries including the debt-stricken Greece.

Europe planned to gradually reduce dependence on Iranian crude and stop imports completely by July to allow itself enough time to find new suppliers and prevent a sharp rise in oil prices.

Iran threatened to stop supplying crude to the EU immediately after the embargo was imposed in late January. However, a parliamentary vote n the matter was delayed.

The Iranian oil mnistry quickly responded to the speculation, saying it has not stopped exporting oil to Europe.

In addition to cutting off oil supplies to Europe, Iran has threatened to block access to the Strait of Hormuz – a major shipping route used to transport a fifth of the world’s oil.

Demand for oil futures received further support from yesterday’s comments from governor of China’s central bank Zhou Xiaochun, who suggested that China could assist Europe in resolving its fiscal problems.

Xiaochun also said that other emerging economies including fellow BRIC members – Brazil, Russia and India – could provide assistance.

US light, sweet crude for March delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), rose 66 cents to US$101.40/barrel in morning trade in New York.

April Brent crude added US$1.15 to trade at US$118.72/barrel on the ICE Exchange this afternoon.

Today’s top risers in the oil and gas sector were:

Aminex (LON:AEX), up 29 percent at 3.9 pence at midday

Xcite Energy (LON:XEL), up 10.5 percent at 124.25 pence

Chariot Oil & Gas (LON:CHAR), up 6.5 percent at 150.75 pence

Wessex Exploration (LON:WSX), up 6.5 percent at 5.8 pence

Urals Energy (LON:UEN), up 6 percent at 7.7 pence

The top fallers were:

Woburn Energy (LON:WBN), down 7.5 percent at 2.2 pence at midday

Xtract Energy (LON:XTR), down 6 percent at 2.05 pence

Caza Oil & Gas (LON:CAZA), down 5.5 percent at 10.41 pence

IGas Energy (LON:IGAS), down 4 percent at 43.4 pence

Silvermere Energy (LON:SLME), down 4 percent at 16.35 pence


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