Oil Heads for Third Yearly Gain on Iran Tension, U.S. Economy Speculation

Oil rose for a second day, heading for a third yearly increase, on speculation escalating tension in the Middle East may disrupt supplies as a recovery in the U.S. economy bolsters demand. Futures advanced for the eighth day in nine, extending this year’s gain to 9.3 percent. A U.S. State Department spokeswoman yesterday called Iran’s threats to shut the Straits of Hormuz “irrational behavior.” About one-sixth of global supply travels through the seaway. The country faces sanctions on its crude exports and a possible boycott by European oil buyers over its nuclear program. Prices gained yesterday after U.S. jobless claims fell to a three-year low. West Texas Intermediate crude for February delivery gained as much as 51 cents, or 0.5 percent, to $100.16 a barrel on the New York Mercantile Exchange. It was at $99.83 at 3:38 p.m. Singapore time, headed for a second weekly increase. Oil climbed 15 percent in 2010. Brent for February settlement was at $108.14 a barrel, up 13 cents on the London-based ICE Futures Europe Exchange, headed for a 14 percent increase this year. The European contract’s premium to