Oil Trades Near Six-Week High on Iran Threat to Strait of Hormuz Shipping

Oil traded near the highest level in six weeks after Iran threatened to block crude transportation through the Strait of Hormuz, increasing concern that global supplies will be curbed amid shrinking U.S. stockpiles. Futures were little changed after rising for a sixth day yesterday, the longest run of advances since November 2010. Iran’s official Islamic Republic News Agency cited Vice President Mohammad Reza Rahimi as saying the country would bar shipments through the strait if sanctions are imposed on its oil exports. U.S. oil inventories probably dropped for a third week, a Bloomberg News survey showed before an Energy Department report this week. Oil for February delivery was at $101.32 a barrel, down 2 cents, in electronic trading on the New York Mercantile Exchange at 1:43 p.m. Singapore time. It rose $1.66, or 1.7 percent, to $101.34 a barrel yesterday, the highest settlement since Nov. 16. Futures have climbed 11 percent this year after increasing 15 percent in 2010. Brent oil for February settlement was down 2 cents at $109.25 a barrel on the London-based ICE Futures Europe exchange. The European contract’s premium to crude in New York was unchanged at $7.93 a barrel, the smallest differential based on settlement prices since Jan. 20.