Oil prices rise on Iran tensions

[1]

World oil prices rose in volatile trading on Monday, as worries over Iranian supplies helped to offset a cut to China's growth outlook and weak eurozone data, traders said.

New York's main contract, light sweet crude for delivery in April, rose 16 cents to $106.86 a barrel.

Brent North Sea crude for April climbed 59 cents to $124.24 in late London deals.

"While slower economic growth in China and across Europe lowers demand expectations, there are still concerns over supply," said Fawad Razaqzada, an analyst for traders GFT Markets.

"Sanctions are affecting the amount of Iranian crude that is coming to market and geopolitical tensions remain elevated."

Israeli Prime Minister Benjamin Netanyahu told US President Barack Obama on Monday that Israel must remain the 'master of its fate' in a firm defence of his right to mount a unilateral strike on Iran.

Netanyahu and Obama held talks in Washington amid clear differences on the imminence of the nuclear threat from Iran and after weeks of speculation that Israel may mount go-it-alone military action.

"Israel must have the ability always to defend itself, by itself, against any threat," Netanyahu said in a short, but impassioned comments to cameras at the start of a meeting with Obama.

The Obama administration has signaled that it does not yet believe Iran has taken a choice to develop a nuclear weapon, or that the time is right for military action, preferring to give biting new sanctions time to work.

Western powers have imposed a raft of economic sanctions on Tehran in a bid to halt its controversial nuclear programme, which is believed to mask a drive to build weapons.

Tehran denies the charge, and has warned that it could close the Strait of Hormuz - a key transit route for global oil supplies - if increased Western sanctions halt Iranian oil exports.

The Islamic republic is the world's fifth largest oil exporter and the second biggest producer in the OPEC cartel.

Oil prices had fallen earlier on Monday after Chinese Premier Wen Jiabao said his country was targeting growth of 7.5 percent in 2012, a third straight reduction for the world's number two economy.

Elsewhere on Monday, a key survey showed that eurozone private sector activity fell back in February after returning to growth in January, underlining predictions of recession.

The composite purchasing managers' index (PMI) for services and industry compiled by the research firm Markit fell to a lower than initially thought 49.3 points in February from 50.4 points in January but was still up from 48.3 points in December.

Any score in the survey of 4,500 manufacturing and services firms above 50 points indicates growth, while a score below indicates contraction.