Brent crude rose on Monday as support from cold weather in Europe, tensions over Iran's nuclear program and turmoil in Syria outweighed pressure from the possibility of a Greek debt default and a resulting curb on oil demand. US crude futures fell on pressure from recent inventory builds, tepid demand for petroleum products and unseasonably mild weather limiting heating fuel demand.
Rising stockpiles at the delivery hub for the US contract at Cushing, Oklahoma, up 1.48 million barrels in the week to January 27, also helped push US prices lower and strengthen Brent's premium to its US crude counterpart. Europe's bitterly cold weather killed another 33 people on Monday. Natural gas supplies to the European Union from Russia improved at the weekend but have not fully recovered, the European Commission said.
"The cold weather is giving us a lift in the products and that is feeding through to Brent," said Rob Montefusco, a trader at Sucden Financial in London. "Also, any sort of trouble in the Middle East is likely to keep Brent well bid." Brent March crude rose $1.27 to $115.85 a barrel by 2:16 pm EST (1916 GMT), having traded from $113.65 to $116.22, its highest since Brent reached $116.48 intraday on November 8.
US March crude fell 75 cents to $97.09 a barrel, having slumped as low as $96.38. Crude trading volumes were above half million lots for both Brent and US crude, with Brent volume 11 percent above and US volume 6 percent under their 30-day averages. Brent's premium to US crude rose and pushed above $18 a barrel, its highest since November.
The euro weakened against the dollar after the failure of Greek coalition parties to approve the terms of a new bailout package rekindled worries about a chaotic default. The dollar index strengthened and a stronger US currency can pressure dollar-denominated oil prices by making the commodity more expensive for consumers using other currencies.
Europe's cold temperatures had February gas oil futures up nearly 3 percent, helping lift US heating oil. US gasoline managed a gain, but pulled off its earlier intraday peak on news of a returning gasoline-making unit at a US Midwest refinery. Italy said it will allow electricity providers to fire up oil-fuelled generators to limit natural gas use as cold weather drags on and after imports from Russia declined.
While most of Europe shivers, US total heating demand this week is expected to be 14.5 percent below normal and heating oil demand to be 20.5 percent below normal. The potential for supply disruptions in the Middle East remained supportive to oil after Iran's Revolutionary Guards deputy commander said on Sunday that Tehran would target any country used as a launching pad for attacks against its soil.
This latest warning came after the country's supreme leader last week threatened reprisals for the West's new ban on Iranian oil exports and after the US defence secretary was quoted as saying Israel was likely to bomb Iran within months to prevent Tehran from assembling nuclear weapons.