Brent hits 8-month high near $121 after Iran move

>

SINGAPORE (Reuters) - Brent crude futures rose on Monday to above $121 a barrel, the highest in eight months, as Iran cut supply to Britain and France, while a policy easing by China and hopes for a Greek bailout also supported prices.

OPEC's second largest producer Iran ordered a halt to its oil sales to Britain and France on Sunday, retaliating against tightening EU sanctions as its ties with the West remained strained over its controversial nuclear programme.

Brent crude hit a session high of $121.15 per barrel, a level not seen since mid-June last year. It stood at $121.14 by 0054 GMT, up $1.56.

U.S. crude for March delivery rose $1.73 to $104.97 a barrel, after earlier rising to $105.21 a barrel, the highest since May last year.

Investors' appetite for riskier assets rose after China's central bank on Saturday cut required reserve ratio of banks, boosting lending capacity by more than $50 billion and supporting demand outlook for commodities from the world's second largest economy.

A softer dollar on expectations Greece would secure a debt bailout this week also supported oil prices. The dollar index .DXY was down 0.34 percent. Dollar-denominated oil becomes more affordable to holders of other currencies when the greenback weakens.

J.P. Morgan Chase (JPM.N) raised its 2012 price forecast for Brent crude by $6 to $118 a barrel on supply risks in key producing countries and underperformance in new frontier areas.

The bank also lifted its 2013 forecast for Brent to $125 a barrel, up from $121, analysts led by Lawrence Eagles said in a research note dated February 19.

(Additional reporting by Manolo Serapio Jr.; Editing by Himani Sarkar)

Related Quotes and News Company Price Related News