Supply of the North Sea crudes underpinning the Brent crude contract is set to hit a record low. Iranian output has been curbed by sanctions and an intensification of debate in Israel over whether to go to war with Iran over its nuclear work added to concern about disruption in Middle East supply.
Brent crude hit $114.28 a barrel, the highest since May 4. US oil rose 28 cents to $93.15.
‘We are seeing prices rise despite weak growth outlook numbers on Friday,’ said Ben Le Brun, a Sydney-based market analyst at OptionsXpress. ‘The Israeli comments, what you see in Israeli media, is a concern. A major concern.’
Israeli Prime Minister Benjamin Netanyahu said yesterday that most threats to Israel's security were ‘dwarfed’ by the prospect of Iran obtaining nuclear weapons, which local media reports said Tehran had stepped up its efforts to achieve.
The supply concerns countered forecasts of weakening oil demand which have weighed on prices. The International Energy Agency recently cut its 2013 oil demand forecast by 400,000 barrels per day, citing a slowdown in global economic activity.