Oil rises on rosy economic data, Iran concerns

SINGAPORE – Oil prices were higher in Asian trade Friday, supported by buoyant economic data from the United States and Germany as well as concerns over Iran’s nuclear program, analysts said.

New York’s main contract, West Texas Intermediate light sweet crude for April delivery, rose 72 cents to $108.55, while Brent North Sea crude for April gained 37 cents to $123.99 in the afternoon.

“The level oil prices have risen to this week is quite unexpected,” said Ken Hasegawa, energy desk manager at Newedge brokerage in Japan.

Positive economic news from the United States and Germany as well as “the continuing tension in Iran are factors supporting oil prices”, he told AFP.

German business confidence unexpectedly rose to a seven-month high as robust domestic demand helped buffer the European Union’s largest economy against the region’s debt crisis, data from the Ifo economic institute showed.

Traders were also buoyed by US data showing initial jobless claims holding steady, a sign that the ailing labour market in the world’s largest economy and biggest oil consumer was slowly improving.

Meanwhile, UN nuclear inspectors returned from Iran on Wednesday with no progress in their search for answers from Tehran on its alleged bid to develop nuclear weapons, leading Washington to brand the trip a “failure”.

Iran has been hit by a raft of economic sanctions by the United States, United Nations and the European Union over its refusal to halt uranium enrichment activities.

Tehran insists that its nuclear program is solely for peaceful civilian purposes.

“With the escalating tensions about Iran manifesting itself in a series of proxy wars, a messy end-game is becoming increasingly likely,” said Barclays Capital in a commentary.