Brent and US crude posted early gains on heightened tensions between the United States and Iran, as world leaders take turns addressing the United Nations in New York this week, Reuters reported.
“President Obama is being more aggressive on Iran and the Iranians testing missiles brings the geopolitical premium back in the market,” Phil Flynn, an analyst at Price Futures Group in Chicago, told the news wire.
Crude futures had also received support from a stronger euro and weaker dollar, along with reports showing improving US consumer confidence this month and home prices rising in July.
Brent’s early rally stalled just 4 cents above the 50-day moving average of $111.43, a level watched by traders, without challenging another closely watched technical point, the 200-day moving average at $111.94.
Brent November crude rose $0.64 to settle at $ 110.4 per barrel, having traded from $109.44 to $111.47.
Prices slipped to $108.78 in Monday’s session, but that was well above Brent’s six-week low of $107.10 hit last Thursday and did not threaten a test of support at the 100-day moving average, another closely watched technical indicator.
US November crude fell $0.56 to settle at $91.37 a barrel, having reached $93.20.
Brent and US crude futures jumped to four-month peaks on 14 September, the day after the US Federal Reserve launched its latest monetary stimulus program.
But oil prices lost ground last week as investors worried that demand for petroleum would be hit by the economic problems that led the Fed and central banks in Japan and Europe to act to bolster the global economy.
US equities fell, giving up early gains , after asset manager BlackRock said the strong equity rally this year had run its course.
“I think that the equity market started to retreat and it brought sellers into both of the oil markets,” said Gene McGillian, analyst at Tradition Energy.
Philadelphia Federal Reserve President Charles Plosser tossed cold water on expectations the Fed’s latest monetary stimulus would do much to help the sputtering economy. He said he opposed the move because it would not do much to boost economic growth or lower the unemployment rate.
US President Barack Obama on Tuesday said the United States will “do what we must” to prevent Iran from acquiring a nuclear weapon and in the same speech at the United Nations accused Tehran of helping to keep a dictatorship in power in Syria.
Obama’s remarks came a day after Iranian President Mahmoud Ahmadinejad said Israel had no roots in the Middle East and would be “eliminated.”
Iran successfully tested a domestically made anti-aircraft system, its Press TV said on Monday, adding to uncertainty over the region.