Oil prices rose above $101 a barrel in Asia on Thursday as concerns loomed that a strike in Nigeria and heightened tension in Iran would threaten global oil supplies.
Benchmark crude for February delivery rose 61 cents to $101.48 a barrel in late Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract fell by $1.37 to settle at $100.87 in New York on Wednesday.
A Nigerian union representing oil workers in Africa’s top crude supplier warned Wednesday they planned to escalate their strike to back protests against an end to fuel subsidies. At the same time, Japan said it would cut oil imports from Iran in support of U.S. sanctions against Tehran.
Tension also mounted as an Iranian nuclear scientist was blown up Wednesday in his car by a motorbike hit man, prompting Tehran to blame a covert Western campaign to halt its nuclear program. It was at least the fourth targeted hit against a member of Iran’s nuclear brain trust in two years.
“The upward move in oil futures is driven by geopolitical supply concerns over Iran and Nigeria, which presents a much more immediate threat to disruption in oil supply,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
The U.S. recently enacted new sanctions targeting Iran’s central bank and its ability to sell petroleum abroad. Iran has threatened to respond to sanctions by shutting the Strait of Hormuz, a transit route for a fifth of the world’s oil.
Shum said the supply concerns have offset fears of a recession in Europe and news of a larger—than—expected crude inventory buildup in the U.S. last week, indicating weak demand.
In other Nymex trading, heating oil rose 2.7 cents to $3.09 per gallon and gasoline futures added 1.6 cents at $2.78 per gallon. Natural gas futures were down 4.5 cents to $2.73 per 1,000 cubic feet.