US confidence, tensions in Iran push oil up
NEW YORK, United States — A rebound in US consumer confidence and escalating tensions in Iran pushed oil to US$100 ($8,565) a barrel yesterday.
The price of benchmark crude rose US$1.58 to end the day at US$99.79 per barrel in New York. It rose as high as US$100.15 a barrel earlier in the session.
Oil prices jumped early in the day after a private survey found that US consumer confidence rose this month to the highest level since July. The Conference Board survey followed robust retail sales over the Thanksgiving weekend. The US is the world’s largest oil consumer, and its economy is driven by consumer spending.
A surge of violence in Iran also helped boost oil prices. Students angered by sanctions against Iran for its nuclear programmed stormed the British embassy in Teheran and other British diplomatic sites before police restored order. Iran is the world’s third-largest oil exporter. While analysts say it’s unlikely that Western nations would impose an embargo on Iranian oil, the potential for more violence in the country could keep prices up.
“It’s a little frightening, especially for anyone who remembers the Iranian revolution,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. From November 1979 until January 1981, 52 American were held hostage after students overran the US embassy in Iran.
Meanwhile, European leaders continued to work on a last-minute strategy to save the euro and prevent a eurozone collapse that could send the region into recession.
While traders kept a wary eye on Europe and Iran, analysts said the consumer confidence numbers in the US show the American economy is on stronger footing. That bodes well for future oil demand.
“Everyone’s really focused on the holiday shopping,” independent analyst and trader Stephen Schork said. “It’s pushed the European situation to the back seat.”
Growing consumer spending should boost energy demand for shipping companies and other major US industries. But motorists are still conserving fuel, according to a study released yesterday by MasterCard SpendingPulse. Its analysis of gasoline purchases shows that American drivers have cut way back this year.
