Oil Prices Increase in North Korea, Futures Oil Advanced
Prices oil rose on concern that geopolitical tension will increase as a son of Kim Jong Il took power in North Korea and the U.S. and its allies prepared to discuss stronger measures against Iran.
Futures advanced 0.4 percent after the official Korean Central News Agency said Kim Jong Un will lead the nuclear-armed nation after the death of his father, Kim Jong Il, on Dec. 17. Gulf Cooperation Council leaders arrived in Riyadh, Saudi Arabia, today for a two-day meeting that may focus on actions needed against Iran.
“Geopolitical worries are boosting the market,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “The announcement of the death of Kim Jong Il adds to the concerns about stability. The market was already nervous about Iran.”
Crude oil for January delivery increased 35 cents to settle at $93.88 a barrel on the New York Mercantile Exchange. The January contract expires tomorrow. The more actively traded February futures rose 30 cents, or 0.3 percent, to $94.05.
Brent oil for February settlement on the London-based ICE Futures Europe exchange increased 29 cents, or 0.3 percent, to $103.64 a barrel.
Tensions on the Korean peninsula have risen since North Korean attacks on a warship and a disputed island last year killed 50 South Koreans. The administration of President Barack Obama, along with the United Nations, increased sanctions after the incidents.