Oil rises above $109 as Iran stays in focus

Oil rose above $109 (Dh400) a barrel yesterday as rising tension over major oil exporter Iran and the announcement that the US economy created more jobs countered concern about the Eurozone debt crisis. The EU and US tightened sanctions against Iran on Thursday in response to mounting concern over Tehran's nuclear work, increasing concern over a possible disruption to oil flows from the second-largest Opec producer. "The Iranian situation is one of those things that could have a really bullish potential impact," said Tony Machacek, energy broker at Jefferies Bache in London. "At the moment, it's a supportive factor and one of the issues that makes you think the market won't come off too far from here even if there is more economic doom and gloom all of a sudden." Gains Brent crude rose 78 cents to $109.77 a barrel by 1310 GMT, after settling down $1.53 at $108.99 on Thursday. US crude climbed 67 cents to $100.87. Brent is heading for a more than three per cent gain. US crude is poised for a rise of over 4.2 per cent, its first weekly gain in three. On Thursday, the Institute for Supply Management said US manufacturing activity rose to its highest in five months, following earlier data on consumer spending and private-sector job creation that were also positive. "Data out of the US has been strong and that has helped support oil prices. The market wants to move higher, but is reluctant to, unless it sees a clear resolution to the Eurozone crisis," said Victor Say, analyst at Informa Global Markets in Singapore. Hurdles In Europe, whose sovereign debt problems have weighed on oil prices for months, the European Central Bank signalled it was ready to act more aggressively to fight the region's crisis if political leaders agree this week on tighter budget controls.