Brent hits eight-month top above $ 121 after Iran, China moves

Tuesday, 21 February 2012 00:25 -     - {{hitsCtrl.values.hits}}

SINGAPORE (Reuters): Brent crude futures rose on Monday to above $ 121 a barrel, the highest in eight months, as Iran cut its exports to Britain and France months ahead of a European Union embargo and as a policy easing by China and hopes for a Greek bailout supported prices.

OPEC’s second largest producer, Iran, ordered a halt to its oil sales to Britain and France on Sunday, retaliating against tightening EU sanctions as its ties with the West remained strained over its controversial nuclear program.

The announcement came as European oil buyers had already made big cuts in purchases from Iran months ahead of the sanctions.

“This is supply-related so it had a psychological impact on the oil market,” Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan, said.

Brent’s price surge may also have triggered short-covering, extending gains for the contract, he added.

Brent crude hit a session high of $ 121.15 per barrel, a level not seen since mid-June last year. It stood at $ 121.07 by 0244 GMT, up $ 1.49.

US crude for March delivery rose $ 1.69 to $ 104.93 a barrel, after earlier rising to $ 105.21 a barrel, the highest since May last year.