il headed for the third monthly gain since September after Greece
’s prime minister said debt-swap talks have made progress, easing concern that Europe
’s sovereign debt turmoil will curb demand.
Futures increased as much as 1.9 percent in New York after slipping yesterday to the lowest settlement in more than a week. Crude also rallied as equities gained and the dollar weakened after Greek Prime Minister Lucas Papademos said that he is committed to debt-swap talks with bondholders. Speculation that sanctions may reduce oil exports from Iran heightened as international nuclear inspectors met with officials in Tehran.
“There’s risk-on this morning,” which is lifting equities and commodities, said Ole Hansen, a senior manager of trading advisory at Saxo Bank A/S in Copenhagen. “We’ve got a host of geopolitical situations among the major producers and that will keep the market supported,” he said, citing Iran tensions and output halts in South Sudan and Nigeria.
Crude for March delivery gained as much as $1.91 to $100.69 a barrel in electronic trading on the New York Mercantile Exchange. It was at $100.17 at 12:13 p.m. London time. The contract yesterday fell 78 cents to $98.78, the lowest closing level since Jan. 20. Prices have risen 1.4 percent this month and are headed for their biggest January gain since 2006.
Brent oil for March settlement was up $1.53, or 1.4 percent, at $112.28 a barrel on the London-based ICE Futures Europe exchange for a gain of 4.6 percent this month. The European benchmark contract’s premium to West Texas Intermediate futures was at $12.20, compared with $11.97 yesterday and a record $27.88 on Oct. 14.
‘Through the Roof’
London-traded Brent earlier jumped as much as 2.8 percent, the biggest gain since Jan. 3, after rising above $111.83, its average closing price in the previous 200 trading days, according to data compiled by Bloomberg.
“Brent went through the roof,” said Olivier Jakob, managing director at Switzerland-based consultants Petromatrix GmbH. “It’s technical triggers in a low-volume environment.”
Equities advanced and the dollar weakened after Papademos, speaking following a European Union summit in Brussels, indicated that Europe will find a way out of its debt problems. The MSCI World Index (MXWO) added 0.5 percent to 1245.52 today. The measure has risen 5.2 percent in January and is set for the biggest monthly gain since October. The euro rose as much as 0.5 percent to $1.3214. A weaker dollar increases the appeal of commodities priced in the U.S. currency.