Brent futures rose above $116 on Tuesday, extending gains after prices settled at a six-month high in the previous session as a cold spell in Europe and supply concerns from the Middle East overshadowed fears Europe’s debt crisis was worsening.
The European benchmark’s premium to U.S. oil stayed around $19 a barrel, near its highest since November, due to the weather and as the United States further tightened sanctions against Iran, stoking already simmering tensions in the region. But, Greece’s wrangling over a bailout fund helped cap those gains.
Brent crude rose 14 cents to $116.07 a barrel by 0331 GMT, gaining for a sixth straight day. U.S. oil increased 19 cents to $97.10, partly reversing the previous session’s losses.
“The geopolitical events surrounding Iran and the Middle East and the severe cold weather sweeping across Europe is providing support for Brent,” said Victor Shum, senior partner at oil consultancy Purvin & Gertz. “We continue to see more upside risks for oil, but Europe’s debt crisis will weigh.”
The pull and push would keep Brent trading around $116, while U.S. crude may inch up towards $100 as the difference between the two benchmarks narrow, Shum said.
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