U.S. light crude for February delivery CLc1 rose $1.04 to $93.73 a barrel by 1315 GMT, off lows of $92.41 earlier in the session. London Brent crude LCOc1 was $1.15 higher at $92.22 a barrel.
Oil, which hit a record high of $100.09 on Jan. 3, has since mostly fallen on growing fears of a possible economic recession in the United States, which could curb demand in the world’s biggest oil consumer.
Oil’s reversal came on a day of rising prices across commodities. Gold and platinum surged to record highs, silver touched a 27-year peak and copper prices also rallied, partly helped by the dollar’s slide to seven-week lows against the yen and the euro.
“Geopolitical tensions between Iran and the United States as well as violence in Nigeria have rekindled worries of a potential supply disruption,” said Gerard Burg, a resource analyst at National Bank of Australia (NAB) in Melbourne.
“That will put upward pressure on prices,” he said.
U.S. President George W. Bush accused Iran on Sunday of threatening global security by backing militants and urged his Gulf Arab allies to confront the issue.
The verbal exchanges between Washington and Tehran have rekindled worries that Iran, the world’s fourth-largest crude exporter, could cut oil exports to retaliate against U.S. pressure over its nuclear programme.
In Nigeria, militants fighting for regional control of the country’s oil-producing south detonated a remote-controlled bomb on an oil tanker on Friday, causing a big fire.
GEOPOLITICS
It was the second rebel attack on Africa’s largest oil industry in a week. Militant raids since 2006 have knocked out a fifth of the country’s oil output capacity.
Analysts said the oil market was caught between the opposing influences of short-term tight supply and downside risks to oil demand from a slowing economy, with geopolitical events and speculators driving prices in the near-term.
“The market is still finding its view on what’s going to happen over the course of the year,” said Simon Wardell, analyst at Global Insight.
The run-up to the OPEC meeting on Feb. 1 is expected to be closely watched for direction, analysts said.
The Organization of the Petroleum Exporting Countries said on Sunday a slowing global economy would not affect oil demand in the short term and lead to a price collapse.
In a newspaper interview, OPEC secretary-general Abdullah al-Badri also said oil prices had been driven to record highs by speculators rather than by any supply shortage, and that the producer group was ready to boost output if needed.
Crude speculators on the New York Mercantile Exchange boosted net long positions to a two-month high in the week to Jan. 8, as oil prices struck a record $100 a barrel. (Additional reporting by Fayen Wong in Sydney; editing by James Jukwey)
