Despite efforts by world's cenbanks to stabilise global markets, oil investors are still jittery
Brent crude traded above $110 for the third session on
Thursday after the world's major central banks moved to tame a liquidity crunch
for European banks, but concerns about slower demand capped prices and offset
any gains due to Iran.
"The pressure on Brent is the weak economy in Europe.
We are not sure if we are going to see significant growth in oil demand. It
could be remain flat for a few years," said Tony Regan, analyst at Tri-Zen
Capital in Singapore.
Brent crude edged up 5 cents to $110.57 by 0320 GMT, after
hitting an intra-day high of $110.75. US crude in were up 27 cents to $100.63 a
Despite the collective efforts of the world's central banks
to stabilise global markets, some oil investors are still concerned that the
euro zone debt crisis will take a long time to be resolved.
Euro zone leaders have so far failed to restore confidence
and some analysts now see a Dec. 9 Brussels summit as a make-or-break moment
for the euro.
The euro zone's woes may have temporarily overshadowed the
effect of Iran's escalating tensions with the West and the threat of further
Tuesday's attack on the British embassy in Tehran by dozens
of students and protesters angry over Britain's unilateral sanctions could
provide extra ammunition to European governments pushing for stronger sanctions
against Iran, in particular a contentious embargo on Iranian oil, diplomats
said on Wednesday.
"You've got some pretty bullish news out there and
Brent failed to rally at the back of it. What's the game?", said Jonathan
Barratt, managing director at Commodity Broking Services in Sydney.
"Every time when there's a problem in Iran, you don't
see the prices coming off. They should go up 5-10 percent. But once the market
realises that prices are cheap enough and decides to take it on, prices will go
Separately, US crude oil and product stocks rose last week
as crude imports increased and refineries scaled back their processing rates, US
Energy Information Administration data showed on Wednesday.
Crude inventories rose 3.93 million barrels to 334.75
million barrels in the week to Nov 25, while analysts polled by Reuters had
projected a 200,000 barrel drawdown, on average.