Oil prices up on Iran risks

Singapore, Mar 6: Oil prices edged higher in Asian trade on Tuesday as geopolitical tensions over crude producer Iran's nuclear programme outweighed weak economic data from Europe and China, analysts said.

New York's main contract, light sweet crude for delivery in April, gained 18 cents to USD 106.90 and Brent North Sea crude for April was up 21 cents to USD 124.01 in morning trade.

"Oil prices edged up... in tug-of-war trading as supply risks and tensions over Iran's nuclear programme provided support, but concerns about global economic growth limited gains," said Phillip Futures in a market commentary.

Prime Minister Benjamin Netanyahu yesterday told US President Barack Obama that Israel must remain the "master of its fate" in a firm defence of his right to mount a unilateral strike on Iran. Israeli leaders are worried that despite their potency, increasingly tough US and European sanctions on Iran and its central bank and vital petroleum industry will not convince Tehran to renounce a nuclear arsenal.

Israel is eager to move quickly and decisively using a military strike before Tehran reaches a point when it could quickly produce weapons-grade uranium. Iran has so far insisted that its nuclear programme is solely for peaceful civilian purposes.

Meanwhile, traders are also keeping a close watch on economic data indicating weakening growth in Europe and China, analysts said. Chinese Premier Wen Jiabao said yesterday that the country was targeting growth of 7.5 per cent in 2012, a third straight reduction as the world's number two economy is buffeted by ongoing troubles in the West and high oil prices.

AFP