ICE August Brent crude settled higher Tuesday, supported by news that South Korea will halt Iranian oil imports and concerns over tightening supplies as an industrial strike in Norway moved into its third day.
August Brent settled $2.01 higher at $93.02/barrel. The contract reached a high of $93.12/b during the session.
NYMEX August crude settled 15 cents higher at $79.36/b and July heating oil settled at $2.5765/gal, up 3.8 cents. July RBOB settled down 7 points at $2.6451/gal.
Summit Energy commodities analyst Matt Smith said news that South Korea will ban imports of Iranian crude when European Union sanctions take effect on July 1 lent support to Brent futures throughout the session.
South Korea failed to win a waiver from EU sanctions banning insurance cover for tankers carrying crude produced in Iran, the country's energy ministry said Tuesday, leaving the Asian nation no option but to halt its crude oil imports from Iran.
Also Tuesday, Norway's Statoil said it was closing down another four North Sea platforms, on top of two already in the process of shutting down, due to a strike by offshore workers over pensions (See story, 1417 GMT).
In contrast, NYMEX August crude futures settled only slightly higher as a result of a weaker euro, mixed US economic data and some investor trepidation ahead of a EU summit later this week.
The difference in emphasis widened the front-month Brent/WTI spread, which settled at $13.66/b, compared with a Monday settle of $11.80/b. Prior to Tuesday's action, the spread had narrowed by about $4/b since the start of June when it reached $15.62/b.
Smith said NYMEX crude bounced off its intraday lows after the S&P/Case-Shiller Home Price Indices showed that the annual change in home prices fell less in April than in March. Home prices fell year on year 1.9% in April and 2.6% in March.
But a fall in US consumer confidence quickly stymied most of the NYMEX crude gains.
The Conference Board's index fell for the fourth month in a row to a reading of 62 in June from one of 64.4 in May that had been revised lower. Market expectations had called for a 63.5 reading.
Falling gasoline prices had a limited effect, according to the index figures, while hiring and income growth slowed in June.
In products markets, front-month RBOB futures snapped a two-day rally, settling lower while the backwardation in the July/August spread narrowed to 12 cents/gal, from 14.76 cents/gal on Monday. At the start of May, the backwardation in the front-/second-month RBOB spread was around 3 cents/gal.
Carl Larry, president of Oil Outlooks, said the market was jittery ahead of the release of weekly oil data on Wednesday.
"A weak demand number [will] weigh on the flat price," Larry said. "We're headed into the 4th of July weekend and gasoline demand just hasn't seen it's summer spike ... could be getting a little late in the game to make a difference."
