Crude oil fluctuated in New York as Iranian state-run television said the country was sending two warships through the Suez Canal and U.S. jobless claims rose more than estimated in a Labor Department report. Oil slipped after gaining as much as 0.4 percent as Iran’s Press TV said an unidentified naval official confirmed the ships’ itinerary. Applications for jobless benefits rose by 25,000 to 410,000 last week, exceeding the 400,000 median forecast of economists surveyed by Bloomberg News. “The market is nervous, there’s no question, about the Middle East situation generally,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “You have this idea something could happen between Israel and Iran versus the latest economic data, which doesn’t look that great.” Crude for March delivery rose 5 cents to $85.04 a barrel at 9:19 a.m. on the New York Mercantile Exchange. Futures have gained 10 percent in the past year. Brent crude for April settlement climbed 15 cents to $103.93 a barrel on the ICE Futures Europe exchange in London. The contract increased to $103.78 yesterday, the highest settlement since Sept. 25, 2008. The difference between the April contracts in London and New York was at $16 a barrel, compared with $15.94 yesterday. April crude on the Nymex gained 9 cents to $87.93 a barrel. The March contract in New York expires on Feb. 22. Iranian officials are in contact with Egyptian officials to arrange passage for the two warships, and the Egyptian authorities believe there’s nothing wrong with the journey, according to the Press TV report. Suez Canal Egypt’s Suez Canal Authority said earlier today that no Iranian warships have applied to use the route since yesterday and none passed through the waterway yesterday or today. Israeli Foreign Minister Avigdor Lieberman said yesterday that Iran was planning later that day to send two gunboats through the canal to Syria, which would involve sailing through the eastern Mediterranean, off Israel’s coast. “The risk premium from the whole Middle East story is more reflected in Brent,” said Tobias Merath, head of commodity research at Credit Suisse AG in Zurich. “The divergence between Brent and WTI is stunning, and explained by regional factors.” Pro-democracy demonstrations stretched into a third day in Bahrain, while protesters clashed with police in Yemen and Libya, the eighth-biggest oil producer in the Organization of Petroleum Exporting Countries. Mideast Supply Countries in the Middle East and North Africa were responsible for 36 percent of global oil production and held 61 percent of proved reserves in 2009, according to BP Plc, which publishes its BP Statistical Review of World Energy each June. The U.S. jobless rate will average 8.8 percent to 9 percent in the fourth quarter, down from November forecasts of 8.9 percent to 9.1 percent, the Federal Open Market Committee said in minutes of its meeting on Jan. 25 and Jan. 26, released yesterday in Washington. The consumer-price index increased 0.4 percent for a second month, more than the 0.3 percent median increase estimate of economists surveyed by Bloomberg News, according to another Labor Department report. The so-called core rate, which excludes volatile food and fuel costs, rose 0.2 percent, the biggest gain since October 2009. To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net. To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

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