Brent jumps to 6-month high on Europe cold snap

NEW YORK (Reuters) - Brent oil rose for a fifth straight session on Monday to settle at a six-month high as cold weather in Europe boosted heating fuel demand and pushed the crude's premium to U.S. oil to the highest since November.
European gasoil led gains across the oil complex, rising more than 3.5 percent as bitter weather killed another 33 people in Europe.
Italy announced it would allow electricity providers to fire up oil-fueled generators to limit natural gas after six-straight days of reduced supplies from Russia.
Additional support for Brent came amid supply concerns from OPEC members Iran and Nigeria.
"The cold weather is giving us a lift in the products and that is feeding through to Brent," said Rob Montefusco, a trader at Sucden Financial in London. "Also, any sort of trouble in the Middle East is likely to keep Brent well bid."
U.S crude fell, however, dragged down by concerns about weak consumption and rising inventories that increased the contract's discount to Brent to more than $19 a barrel from more than $2, the largest discount since November.
Traders said the premium could blow out levels eclipsing those seen last year over $28 a barrel as Midwest refinery turnarounds and rising pipeline flows boost inventories in the region, home to the Cushing, Oklahoma, delivery point to the New York Mercantile Exchange's oil futures contract.
Brent March crude rose $1.35 to settle at $115.93 a barrel, highest close since August 2. Monday's trade ranged from $113.65 to $116.22. The $116.22 was the highest since $116.48 intraday on November 8.
U.S. March crude fell 93 cents to settle at $96.91 a barrel, having slumped as low as $96.38.
Heating oil prices traded up nearly 2.3 percent in late activity, despite forecasts that U.S. total heating demand would run about 14.5 percent below normal and heating oil demand would be 20.5 percent below normal.
Trading volumes were heavy, with Brent volume about 22 percent above the 30-day moving average and U.S. crude about 18 percent over that average.
The euro weakened against the dollar after the failure of Greek coalition parties to approve the terms of a new bailout package rekindled worries about a chaotic default.
The dollar index edged up and a stronger U.S. currency can pressure dollar-denominated oil by making the commodity more expensive for consumers using other currencies.
THREATS TO SUPPLY
Traders also eyed developments in the Middle East and Nigeria, where a police station was the site of the latest attack by suspected Islamist militants.
Iran's Revolutionary Guards deputy commander said on Sunday that Tehran would target any country used as a launching pad for attacks against its soil. Iran's supreme leader last week threatened reprisals for the West's ban on Iranian oil exports in the standoff over Tehran's nuclear program.
China, the largest consumer of Iranian crude, will halve its crude oil imports from Iran in March versus year-ago levels as a dispute over payments and prices stretches into a third month, oil industry sources involved in the deals said.
Asia's imports of West African crude are at record highs as sanctions on Iran reduce supplies, a Reuters survey of West African flows suggest.
In Syria an explosion ripped through an oil pipeline feeding a main refinery in the city of Homs, the second in a week to hit the pipeline.
(Additional reporting by Gene Ramos in New York, Claire Milhench in London and Francis Kan in Singapore. Editing by Bob Burgdorfer.)

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Market Watch: Bourse surges to six-month high

 

KSE’s benchmark 100-share index jumps 154 points.

 

KARACHI: The stock market closed at a six-month high on Monday as investors took activity up a notch on rumours of foreign buying and ease in the circular debt in the next few days.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index jumped 1.29 per cent or 154.3 points to end at the 12,136.92 point level.
“Term Finance Certificates are expected to be issued in the next few days to resolve the circular debt issue,” said JS Global Capital analyst Shakir Padela.
A healthy intra-day upward correction was also witnessed after reports surfaced that Supreme Court suspended membership of a few senators and parliamentarians including Finance Minster Abdul Hafiz Shaikh.
Foreign institutional investors were net buyers of Rs313 million worth of shares, according to data maintained by the National Clearing Company of Pakistan Limited.
Trade volumes surged to 196 million shares compared with Friday’s tally of 130 million shares.
National Bank of Pakistan closed the day on its upper circuit on expectations of high cash and bonus payout with the full year result, added Padela. The country’s largest bank by asset was up 5% to Rs45.29.
Second tier banks were also in limelight as result driven rally finally gathered momentum. Bank Alfalah rose 2.1%, Askari Bank gained 7%, Standard Chartered Bank 7%, Bank of Punjab 12% and NIB Bank gained 3%.
Shares of 353 companies were traded on Monday. At the end of the day 195 stocks closed higher, 79 declined while 79 remained unchanged. The value of shares traded during the day was Rs5.57 billion.
Jahangir Siddiqui and Company was the volume leader with 32.14 million shares gaining Re0.1 to finish at Rs7.56. It was followed by DG Khan Cement with 12.63 million shares gaining Rs0.61 to close at Rs24.83 and Lafarge Pakistan with 9.83 million shares firming Rs0.06 to close at Rs2.29.

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How the major stock indexes fared on Monday

Stock indexes closed slightly lower Monday as talks dragged on between Greek political leaders over a package of spending cuts and other measures required for the country to get more bailout loans.
President Nicolas Sarkozy of France and German Chancellor Angela Merkel warned Greek leaders that they need to push through another package of cost-cutting measures or risk letting the country go bankrupt.
The Dow Jones industrial average fell 17.10 points, or 0.1 percent, to close at 12,845.13.
The Standard & Poor's 500 index slipped 0.57 of a point to 1,344.33.
The Nasdaq composite fell 3.67, or 0.1 percent, to 2,901.99.
For the year so far:
The Dow is up 627.57 points, or 5.1 percent.
The S&P 500 is up 86.73 points, or 6.9 percent.
The Nasdaq is up 296.84 points, or 11.4 percent.

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Deeper Iran sanctions; US targets its central bank

 

FILE- In this April, 9, 2007, file photo Iranian President Mahmoud Ahmadinejad, speaks at a ceremony in Iran's nuclear enrichment facility in Natanz, 300 kms 186 (miles) south of capital Tehran, Iran. For the first time in nearly two decades of escalating tensions over the Iranian nuclear program, it appears that world leaders are genuinely concerned that an Israeli military attack on the Islamic Republic could be imminent, an action that many fear might trigger war, terrorism and global economic havoc. Photo: Hasan Sarbakhshian / AP

WASHINGTON (AP) — Targeting Iran's economy, the U.S. ordered tough new penalties Monday to further pinch the country's financial system and encourage Israel to give sanctions more time before any military action against Iran's nuclear program.
The new, stricter sanctions, authorized in legislation that President Barack Obama signed in December, will be enforced under an order he signed only now. They give U.S. banks new powers to freeze assets linked to the Iranian government and close loopholes that officials say Iran has used to move money despite earlier restrictions imposed by the U.S. and Europe.
The action against the Central Bank of Iran is more significant for its timing than its immediate effect. It comes as the United States and its allies are arguing that tough sanctions can still persuade Iran to back off what the West contends is a drive to build a nuclear bomb.
The U.S. and Europe want to deprive Iran of the oil income it needs to run its government and pay for the nuclear program. But many experts believe Iran will be able to find other buyers outside Europe.
The European Union announced last month it would ban the import of Iranian crude oil starting in July. The U.S. doesn't buy Iranian oil, but last month it placed sanctions on Iran's banks to make it harder for the nation to sell crude. The U.S., however, has delayed implementing those sanctions for at least six months because it is worried about sending oil prices higher at a time when the world economy is struggling. Iran exports about 3 percent of the world's oil
The faster and more painfully sanctions can be seen to work, the better the case to shelve any plan by Israel to bomb Iran, a pre-emptory move that could ignite a new Mideast war. Taking this initial step against the Central Bank, the first time the U.S. has directly gone after that major institution, is one way the Obama administration can show momentum now.
Israel, meanwhile, has been increasingly open about its worry that Iran could be on the brink of a bomb by this summer and that this spring offers the last window to destroy bomb-related facilities. Many Israeli officials believe that sanctions only give time for Iran to move its nuclear program underground, out of reach of Israeli military strikes.
White House spokesman Jay Carney denied that Monday's unexpected announcement of new banking sanctions was a sign of heightened worry about an Israeli attack.
"There has been a steady increase in our sanctions activity and this is part of that escalation," he said.
Carney said U.S. sanctions on Iran are already squeezing Iran's economy and have exacerbated tensions within the Iranian leadership.
"There is no question that the impact of the isolation on Iran and the economic sanctions on Iran have caused added turmoil within Iran," he said.
Iran is the world's third-largest exporter of crude oil, giving its leaders financial resources and leverage to withstand outside pressure. Last year, Iran generated $100 billion in revenue from oil, up from $20 billion a decade ago, according to IHS CERA, an energy consulting firm.
If Iranian oil is prevented from getting to market, other suppliers could make up the difference. The U.S. has been pressuring other Middle East and African nations to step up production for sale to Europe. Saudi Arabia has said it could increase production to make up for any lost Iranian crude.
Iran's disputed nuclear program became a global concern more than five years ago, when the extent of the country's research and uranium enrichment began to be known. Since then a web of international economic and other sanctions have failed to stop Iran's progress toward a point when it could build one or more nuclear devices.
U.S. intelligence agencies say Iran is indeed close to that ability but has not yet decided to go ahead. Iran says its nuclear program is peaceful and denounces sanctions as aggression.
The new U.S. penalties were unexpected now. The sanctions were included as an amendment in the wide-ranging defense bill the president signed in late December, though when and how they were to be levied on Iran was unclear.
The White House had previously said it would take months to evaluate the likely effect on the fragile global economy before taking the next large steps, including new penalties on the Central Bank.
Now, U.S. institutions are required to seize Iranian state assets they come across, rather than rejecting the transaction involved.
The value of Iranian assets affected by the new order was not clear. Iran does almost no direct business with the United States after three decades of enmity, but its money moves through the world financial system and its oil is sold in dollars.
In a letter to Congress, Obama said more sanctions were warranted, "particularly in light of the deceptive practices of the Central Bank of Iran and other Iranian banks."
He cited the hiding of transactions of people or institutions and other loopholes.
In an interview Sunday with NBC, Obama said the U.S. has "a very good estimate" of when Iran could complete a nuclear weapon, and he spoke favorably of the effect of sanctions and diplomacy to resolve the impasse.
Obama addressed the concern about Israel but suggested there is still time.
"I don't think Israel has made a decision on what they need to do," Obama said.
He did not answer a question about whether Israel has promised to notify the United States before any pre-emptory strike.
Republican presidential candidates have accused Obama of being too timid in his dealings with Iran, and while U.S. officials reject that characterization they acknowledge they are stepping cautiously because of fear of upsetting the global economy.

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Canadian ambassador to remain in Syria

OTTAWA - Canada will not shut its embassy in Syria, officials say, after the United States evacuated all diplomatic staff and closed its embassy in the country on Monday.
A spokesman for Foreign Minister John Baird said that Canada is not considering following the U.S. lead.
``The U.S. as a sovereign nation makes decisions based on its situation,'' wrote Rick Roth in an email. ``We make decisions based on ours.''
Roth said Canada's ambassador to Syria - retired vice-admiral Glenn Davidson - will remain in Damascus to voice Canada's displeasure at the ongoing government crackdown in the country.
``Canada has extremely strong views about the abhorrent actions of the current regime,'' he wrote. ``And our ambassador continues to deliver those messages at the highest levels.''
``We have been clear: Assad must go,'' Roth wrote.
In August, Davidson was named Canada's ambassador to Afghanistan, but has not yet left Syria to assume his next post due to the continuing turmoil in the Middle Eastern country.
Opposition foreign affairs critic Helene Laverdiere said Monday it's time for Canada to recall its ambassador to Syria.
``We think that it would be time to recall our ambassador to Syria, as to send a strong message to the Syrian regime,'' the NDP MP told reporters in Ottawa Monday. ``This will send a very clear message to the Assad regime.''
Anti-government protesters have been calling for President Bashar al-Assad to step down since unrest began in January 2011. The regime has fought back against the uprising, and is currently shelling civilian areas of the revolutionary city of Homs. Syrian opposition groups say 50 were killed in the most recent attack on Homs.
The United States cited security concerns as the reason for closing its mission to Damascus.
Laverdiere, a former career diplomat, said Canada should not go so far.
``It's not a question of cutting diplomatic ties completely,'' she said. ``Our position doesn't go as far as that of the United States.''
With many Canadians still in Syria, the embassy must remain open to provide consular services, she said.
``It's clear the Canadian government has a responsibility to Canadians who find themselves in Syria,'' Laverdiere said.
On Jan. 31, Baird issued orders to reduce the number of diplomatic staff in Syria.
``Due to the growing instability in Syria, Canada has reduced its diplomatic staff in Syria to core personnel only,'' he said. ``Canada's embassy remains open and continues to offer limited services in Damascus and in Aleppo through our honorary consulate.''
The visa and immigration section of Canada's mission in Damascus has been closed, Baird said, and those services have been transferred to neighbouring countries.
Baird said Canadians have begun leaving Syria, and he urged all other Canadians to do the same.
``Since Dec. 15, approximately 300 Canadians have informed us that they have left Syria,'' he said. ``We hope that more will follow their example.''
``We continue to urge Canadians still in Syria to leave now.''

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Sharapova sets sights on London Olympics

PARIS: Maria Sharapova is making the London Olympics one of her top priorities this year after missing the Beijing Games with an injury.

The third-ranked Russian has already won three Grand Slams but has never competed at the Olympics.

Sharapova said on Monday that "representing my country will be a huge honor," and is something she has wanted to do "since I was a young kid."

Sharapova missed the 2008 Beijing Olympics because of a shoulder injury.

Sharapova reached the final of the Australian Open last month and said she hopes that will be a springboard for winning another Grand Slam title this year.

She is competing in the Open GDF Suez for the first time this week.

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