Commodities – Oil hovers near 9-month high on Greece deal and Iran embargo

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Crude oil prices remain close to nine-month highs today, hovering close to $105 a barrel. On Monday prices touched $105.42, the highest since May 2011 as sentiment on a Greek bailout deal helped buoy commodity prices.

Recently oil has given a strong rally, due to strong US data showing evidence of recovery in the world’s largest economy. However, rising prices are also due to a loss of global supplies due to tensions in Iran, as concerns persist over Middle Eastern supply constraints, with Iran threatening to further cut oil exports.

Recently, Western sanctions on Iran affected supplies from Iran which is OPEC’s second-largest producer. The European Union enraged Tehran last month when it agreed to slap a ban on Iran’s oil from July 1.

On Sunday, Iran announced a retaliatory halt in oil sales to French and British companies, a largely symbolic step as oil sales to the two countries were already greatly reduced.  Top buyer China will import less oil from Iran this year, while European companies are also cutting purchases ahead of a July 1st embargo by the European Union.