Commodities – Oil rises after unexpected drop in EIA inventory and Iran supply cutoff concerns

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Oil prices jumped sharply earlier today on concern about supply disruption from Iran after Iran’s Press TV reported Iran had banned exports to six EU countries in retaliation for European Union sanctions against the Islamic state.

Crude oil for March delivery spiked up to $102.52 a barrel on the New York Mercantile Exchange in early New York trading hours.

Brent crude Oil hit a six-month high near $120 a barrel was up as high as  $119.99, the highest intra-day price since August 1.

The spike in prices soon calmed down after, Iranian and Italian officials denied the cutoff move.

But later today crude-oil prices rallied again after a weekly government report on supplies showed a surprise decline.

The Energy Information Administration reported crude supplies for the week ended February 10 had declined by 200,000 barrels. Expectations were for crude inventories to rise 1.9 million barrels on the week.

Crude hovered at $101.85 a barrel around 11am New York time.