Oil rises as Saudi seeks to keep prices high

17 January 2012, Sweetcrude, LONDON – Crude oil prices rose Tuesday as Saudi Arabia expressed desire to keep prices at around $100 a barrel and in the wake of positive economic data from energy-hungry China.
New York’s main contract, West Texas Intermediate crude for delivery in February, jumped $2.06 to $100.76 a barrel, according to AFP report.

Brent North Sea crude for March gained $1.12 to $112.46 in London midday deals.
“Crude is trading higher, bolstered by news from an interview with the Saudi oil minister that Saudi Arabia is aiming to keep the price of oil at $100 per barrel or above, to finance its increasing domestic expenditure,” said Westhouse Securities analyst Peter Bassett.

Saudi Oil Minister Ali al-Naimi, in an interview with CNN on Monday, also said that his country’s output could be boosted by around 2.6 million barrels per day to offset a potential cut in Iranian exports.
But Iran on Tuesday warned Saudi Arabia to reconsider its vow to make up for any shortfall, saying Riyadh’s pledge to step into the market was unfriendly.

The United States and the European Union are ramping up sanctions on Iran aimed at sharply reducing Iran’s oil exports and income in the hope of halting its alleged development of atomic weapons.

The oil market also reacted to news that China’s economy grew by 8.9 percent in the last quarter of 2011, which although slower than the previous three months was better than the 8.6 percent expected.
China is the biggest consumer of energy and the second largest economy in the world.

Price gains were limited, however, by news that Nigeria’s unions had ended a week-long strike over fuel costs following the president’s decision to reduce petrol prices.

The strike begun on January 9 and had shut down Africa’s most populous nation and largest oil producer, bringing tens of thousands out into the streets in protest.

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