Saudi Arabia, the world's top exporter, said on Monday that could lift its production by some 2 million barrels per day 'almost immediately'.
Brent crude futures traded 80 cents higher at $111.22 a barrel at 1538 GMT, after touching an intra-day high of $111.67. U.S. crude rose 65 cents to $99.35 a barrel, having traded as high as $99.80 earlier in the session.
The latest move from Iran comes as top Asian buyers of Iranian oil -- China, Japan and South Korea -- tour alternative Middle East suppliers while the United States pressures nations to stop importing oil from the Islamic Republic.
Now, eyes will be spotted the performance of the European economy, especially after the ECB lent the European banks huge amount of money, and if that money will help the euro zone to continue recovery process amid big challenges.
"Iran is the main topic still in the market with the new warnings against other Arab producers," said Andy Sommer, oil market analyst with EGL in Switzerland. "We have strong wordings from Iran in the last couple of days."
Saudi Arabia on Monday expressed doubts over Iran's claim it could block the main oil shipping route out of the Gulf and made clear it was ready to pump more oil after sanctions threatened to cut Iranian sales of crude.
The comments follow a warning from Tehran that any move to replace Iranian oil on the markets would "not be perceived as friendly," the country's OPEC governor told a daily newspaper.
Saudi Oil Minister Ali al-Naimi said in an interview with CNN on Monday the world's No. 1 oil exporter -- the only OPEC member with significant unused capacity -- could increase oil production by about 2 million bpd "almost immediately" from current levels, noting it wants oil prices to stabilize at around $100 a barrel.
Concern over shipments from two key African exporters, Nigeria and Sudan, also lent support to prices.
Nigerian trade unions called of strikes after president Goodluck Jonathan announced a cut in petrol prices to 97 naira ($0.60) a liter on Monday, partially reversing the effects of an end to fuel subsidies which had more than doubled the pump price to 150 naira from 65 naira.
"Although the Nigerian strike has been called off ... there are still underlying issues with Iran which are keeping prices reasonably buoyant at the moment," said Tony Machacek of Jefferies Bache in London. (source Reuters) For the latest updates on the stock market, visit Stock Market Today For the latest updates PRESS CTR + D or visit Stock Market news Today
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