Tuesday February 21, 2012
* Iran's big oil buyers cut back
* Europe seals new Greek bailout
Oil held near $120 a barrel on Tuesday as world consumers grappled with supply disruptions ranging from Iran to Sudan to the North Sea.
Oil also rose briefly after Europe's much-awaited bailout of Greece. But while the deal resolves Athens' immediate financing needs, it is unlikely to revive its shattered economy.
Brent rose 1 cent to $120.06 by 0935 GMT after closing above $120 on Monday for the first time since June 15.
U.S. crude was at $104.87, up $1.63, after touching $105.44 on Monday, its highest since May 5. The New York Mercantile Exchange did not issue a settlement price on Monday because of a holiday and the contract expires on Tuesday.
The loss of some global supply, a recovering U.S. economy and China's easing policy to support growth have lifted oil and stoked investor appetite for riskier assets.
Oil's rally is unlikely to lose steam as Western sanctions bite into supply from Iran, OPEC's second largest producer.
"With its current regime, Iran is always going to be considered a hostile nation by the West, so the long term solution maybe for countries to wean themselves off Iran's oil supply where possible," Ben Le Brun, a Sydney-based markets analyst at OptionsXpress, said.
"While this is playing out it will create supply constraints and underpin support for the oil price."
Tehran's biggest oil customers are already making voluntary cutbacks ahead of tighter sanctions by Europe and Washington that aim to starve Iran of oil revenue to support its controversial nuclear programme.
Top buyer China will import less oil from Iran this year, while European companies are also cutting purchases ahead of a July 1 EU embargo.
And Iran's third largest customer Japan is likely to reduce imports from Tehran to win waivers from U.S. sanctions.
Source: Reuters (Reporting by Peg Mackey)