Oil Rises in New York on Report That Iran Fired Missiles

Oil rose in New York after falling for a fifth time in six days as Iran fired missiles as part of a military exercise and before reports that will probably show U.S. consumer confidence and the housing market improved.

Futures advanced as much as 1.2 percent, after prices slid 6.2 percent last week, as state-run news agency Fars reported that Iran fired four missiles in the Persian Gulf as part of a war game. Iranian President Mahmoud Ahmadinejad said in a U.S. television interview yesterday that his nation will defend itself if attacked by Israel.

“Iran has been supporting prices today after the hostile rhetoric yesterday and over the weekend,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “U.S. data is supportive in the short term.”

Oil for November delivery increased $1.01 to $92.94 a barrel in electronic trading on the New York Mercantile Exchange as of 12:45 p.m. London time. It earlier gained as much as $1.14 cents to $93.07. The contract declined to $91.93 a barrel yesterday, the lowest close since Sept. 20. Prices are down 6 percent this year.

Brent for November settlement gained $1.22 to $111.03 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $18.09, from $17.88 yesterday.

Military Exercise

The missiles “were fired simultaneously toward the same large target at sea, the size of a warship, and sunk it within 50 seconds,” Admiral Ali Fadavi, the Revolutionary Guard Corps’ navy commander, said in comments reported late yesterday by Fars. The test-firing took place on Sept. 23, he said.

The Islamic republic monitors the entirety of its coast on the Persian Gulf and is keeping an eye on U.S. bases in the Gulf, Fadavi said. The Guards will hold a military exercise in the Strait of Hormuz before the end of the Iranian calendar year on March 20, he was cited as saying.

“Any nation has the right and will indeed defend herself” if attacked, Ahmadinejad said in an interview with CNN. A war started by Israel would be backed by the U.S., he said Sept. 23 on state-run Al-Alam television, Fars reported.

Confidence among American consumers probably rebounded this month and a gauge of home prices rose the most in almost two years in July, economists said before reports today.

Consumer Confidence

The Conference Board’s index of U.S. consumer confidence rose to 63.2 in September from 60.6 in August, based on a Bloomberg News survey of economists before the report at 10 a.m. New York time. An index from S&P/Case-Shiller at 9 a.m. in New York will show home prices in 20 U.S. cities rose 1.1 percent in July from a year earlier, the most since August 2010, a separate survey showed.

The U.S. Federal Housing Finance Agency may say that home prices rose 0.6 percent in July, the sixth consecutive monthly increase. Stuart Miller, chief executive officer of homebuilder Lennar Corp., said yesterday that housing is “beginning to revert to normal.”

“In the medium to long term, the monetary policy measures announced by the central banks are likely to bring about higher prices,” Carsten Fritsch, a Commerzbank AG analyst based in Frankfurt, said today in a report.

U.S. crude supplies probably rose last week for the longest run of increases since May, according to a Bloomberg survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate inventory data today.

Inventories advanced for a third week in the seven days ended Sept. 21 as output rebounded after Hurricane Isaac, according to the median estimate of nine analysts in the Bloomberg survey. Stockpiles climbed to 369.6 million barrels, which would leave them at the highest level since the week ended Aug. 3. Seven of the respondents forecast a gain and two projected a decline.

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