Oil Jumps to 9-Month High After Iran Cuts Supply

(AP) -- Oil prices jumped to a nine-month high near $105 a barrel Monday in Asia after Iran said it halted crude exports to Britain and France in an escalation of a dispute over the Middle Eastern country's nuclear program.

Benchmark crude was up $1.75 to $104.99 per barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Earlier in the day, it rose to $105.21, the highest since May. The contract rose 93 cents to settle at $103.24 per barrel in New York on Friday.

Brent crude was up $1.52 at $121.10 per barrel in London.

Iran's oil ministry said Sunday it stopped crude shipments to British and French companies in an apparent pre-emptive blow against the European Union after the bloc imposed sanctions on Iran's crucial fuel exports. They included a freeze of the country's central bank assets and an oil embargo set to begin in July.

Iran's Oil Minister Rostam Qassemi had warned earlier this month that Tehran could cut off oil exports to "hostile" European nations. The 27-nation EU accounts for about 18 percent of Iran's oil exports.

The EU sanctions along with other punitive measures imposed by the U.S. are part of Western efforts to derail Iran's disputed nuclear program, which the West fears is aimed at developing atomic weapons. Iran denies the charges, and says its program is for peaceful purposes.

Oil prices were also boosted by China's decision to boost money supply in a bid to spur lending and economic growth. China's central bank said Saturday it will lower the ratio of funds that banks must hold as reserves, a move that frees tens of billions of dollars.

Oil has jumped from $96 earlier this month amid optimism the global economy may grow more this year than previously expected. J.P. Morgan raised its Brent crude price forecast to as high as $135 from $120.

"Building economic momentum has the potential to pull oil prices higher for the next 12 to 24 months," J.P. Morgan said in a report.

In other energy trading, heating oil added 0.6 cent to $3.22 per gallon and gasoline futures rose 1.4 cents to $3.22 per gallon. Natural gas jumped 9.2 cents to $2.66 per 1,000 cubic feet.