The contract rose USD 1.52 to USD 106.87 per barrel in New York on Friday. Brent crude for May delivery was up 5 cents at USD 125.18 per barrel in London. Crude has hovered between USD 105 and USD 110 for the last month, up from USD 75 in October, amid worries that a military strike by Israel or the US on Iran's nuclear facilities could disrupt supplies from the oil-rich Middle East.
On Friday, reports said Iran's crude exports fell sharply last month, suggesting sanctions imposed by Western powers have begun to impact that country's economy. President Barack Obama said yesterday that there is still time to resolve the dispute over Iran nuclear program diplomatically, but that the window is closing.
"A sizable risk premium is likely to remain in place for some time while the Iranian situation goes unresolved," National Australia Bank said in a report. It "suggests that prices through 2012 will continue to sit north of USD 100." Signs of tepid crude demand in the US and Europe and slowing economic growth in China were weighing on prices. Analysts are also concerned higher fuel costs will undermine consumer spending and trigger inflation. "With economic conditions in the big developed economies weak and the slowdown in China, demand conditions are not particularly conducive to current high prices," NAB said.