Oil up in Asia on Iranian tensions

SINGAPORE – Oil prices pushed higher in Asian trade Monday after Iran’s military reportedly said it had shot down a US drone and ahead of a Franco-German euro rescue meeting, analysts said.

New York’s main contract, light sweet crude for delivery in January, was up 33 cents to $101.29 a barrel.

Brent North Sea crude for January delivery rose 48 cents to $110.42.

“Crude prices rose… boosted by heightened geopolitical tensions over Iran,” Phillip Futures said in a report.

Iran’s military said it shot down a US Army drone inside its territory near the Afghan and Pakistani borders on Sunday and threatened retaliation for the incursion, Iranian media reported.

A Tehran newspaper also quoted the head of Iran’s parliamentary economic commission as warning that oil prices would soar to $250 a barrel if the United States and European Union enacted a new set of sanctions against the country.

However, traders were cautious ahead of a meeting between the leaders of France and Germany with a rescue plan for the euro on the agenda, Phillip Futures said.

“Today, Chancellor Angela Merkel and French President Nicolas Sarkozy will hold talks in Paris in an attempt to bridge differences on a crisis resolution,” it stated.

“Going forth, the European Union summit in Brussels on December 9 will be watched closely for the latest development (in the) eurozone debt crisis.”