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Jan 17, 2012, 08.20 AM IST
Crude oil futures trade close to USD100 on Iran, Nigeria worries
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD99.69 a barrel during U.S. morning trade, jumping 0.82%.
It earlier rose by as much as 1.1% to trade at a session high of USD99.97 a barrel.
Oil traders continued to monitor tensions between Iran and the West after the Islamic Republic warned over the weekend that a disruption to crude supplies through the Strait of Hormuz would cause a shock to markets that 'no country' could manage.
Meanwhile, the Iranian Foreign Ministry has confirmed it has received a letter from the U.S. concerning the Strait of Hormuz, 'via three different channels,' although the contents of the letter were not disclosed.
Britain's foreign secretary William Hague said Sunday that he believed the European Union would agree tough new sanctions against Tehran's oil sector later this month. Foreign ministers from the 27 European Union member states are scheduled to decide on sanctions on January 23 in Brussels.
Elsewhere, Nigeria's main labor unions suspended protests over last week's removal of fuel subsidies after President Goodluck Jonathan announced earlier Monday that oil prices will come down by almost 31%.
However, concerns over a disruption to the country's oil sector remained as only part of the subsidy was reinstated.
The country's two main unions earlier announced the end of street protests but said workers should stay at home until labor leaders had reviewed the President's announcement.
Nigeria is Africa's largest oil producer, priding nearly 2.0 million barrels per day, with exports going largely to the U.S. and Europe.
Meanwhile, markets continued to eye developments surrounding the euro zone's debt crisis after ratings agency Standard & Poor's cut France's triple-A rating by one notch on Friday and said it would decide shortly whether to downgrade the triple-A rating on the euro zone's bailout fund, the European Financial Stability Facility.
S&P also downgraded eight other euro zone sovereigns, including Italy, Spain, Cyprus and Portugal.
Earlier in the day, ratings agency Moody's said it was maintaining France's triple-A rating and stable outlook on its debt for now, but added that it would update markets in the first quarter of 2012.
Adding to nervousness over the euro zone's debt crisis, talks aimed at negotiating a restructuring of Greece's debts broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds. Negotiations are expected to resume on Wednesday.
Without the swap, debt-stricken Greece is unlikely to secure a second financial bailout, raising fears over a possible disorderly Greek default in March, when massive bond payments are due.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery rose 0.75% to trade at USD111.17 a barrel, with the spread between the Brent and crude contracts standing at USD11.48 a barrel.
NYMEX floor trading will be closed on Monday for the Martin Luther King Jr. holiday.
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