* Iran oil exports drop 300,000 bpd in March-consultant
* Dollar index weaker, supportive to oil
* Coming up: API oil data, 4:30 p.m. EDT Tuesday
(New throughout, updates prices, market activity)
By Robert Gibbons
NEW YORK, March 23 Oil prices rallied
on Friday on news that Iranian oil exports have
fallen significantly this month as tightening Western sanctions
have caused some buyers to stop or scale back purchases.
Iran's crude exports appear to have fallen in March by
around 300,000 barrels per day, or 14 percent, the first
sizeable drop in shipments this year, according to estimates
from industry consultant Petrologistics and an oil company.
After Brent crude futures extended their rise to nearly $4
and U.S. crude also rose sharply, oil prices pared gains
following data that showed U.S. new single-family home sales
declined in February.
The retreat from intraday peaks left both Brent and U.S.
crude posting weekly losses.
Brent crude rose $1.99 to settle at $125.13 a
barrel, having swung from $123.10 to $127.06. Brent posted
68-cent weekly loss, a second straight weekly decline.
U.S. crude rose $1.52 to settle at $106.87 a barrel,
having traded from $105.16 to $108.25. For the week, it ended 19
Brent's premium to U.S. crude CL-LCO1=R rose to $18.26
based on settlements.
Volatility was aided by tepid volumes. Brent trading volume
was 4 percent below its 30-day average, with U.S. crude turnover
27 percent below with 1-1/2 hour left in post-settlement
"The recent pull backs had not changed the price trend
higher and when the (Iran exports) headlines hit the push higher
triggered buy stops and the price move also took place on a day
with relatively light volume," said Tim Evans, energy analyst at
Citi Futures Perspective in New York.
U.S. gasoline and heating oil futures also
posted 1 percent gains.
The CME Group said on Friday that it plans to list
additional months of its New York Harbor heating oil futures
contract from May 2013 with an ultra-low-sulfur diesel
specification in response to customer requests.
Money managers cut their net long U.S. crude futures and
options positions, in the week to March 20, the U.S. Commodity
Futures Trading Commission, said in a report on Friday.
Ahead of the Iranian export news, oil prices had received
support from a drop in the dollar. The euro climbed to a
three-week high against the dollar. A weaker U.S.
currency can lift dollar-denominated crude oil by making it less
expensive for consumers using other currencies.
The oil complex rally came after crude futures slid the
previous session on disappointing Chinese manufacturing data and
euro zone PMI figures.
IEA: NO SUPPLY DISRUPTIONS
Before the price spike on news of slumping Iranian exports,
the International Energy Agency's (IEA) said it did not believe
there would be any disruptions to global oil supply as Saudi
Arabia and other Gulf producers will bring more oil to the
Saudi Arabia said Tuesday it was ready to raise its output
to 12.5 million barrels per day from current levels just below
10 million bpd.
Malaysia's state oil firm Petronas will halt imports of
Iranian crude from April, according to sources in the company.
This follows import cuts by major buyer South Korea in the
first two months of 2012.
In a concession to Asian buyers, the European Union will
allow some insurance on Iranian oil shipments before the bloc's
full embargo starts on July 1, member states agreed on Thursday.
(Additional reporting by Gene Rams in New York, Claire Milhench
in London and Francis Kan in Singapore; Editing by Dale Hudson
and David Gregorio)