Oil traded near the lowest in almost four weeks as speculation that measures to quell Europe’s debt crisis are failing countered Iran’s call to Arab suppliers to refrain from supporting a ban on its crude exports.

Futures were little changed after declining 2.8 percent last week. France and Austria lost their top credit ratings in a string of downgrades by Standard & Poor’s before Greek officials reconvene with creditors on Jan. 18 after talks stalled last week over the scope of investor losses in a proposed debt swap. Mohammad-Ali Khatibi, Iran’s OPEC governor, said support by Arab producers of a European import embargo would be a “dangerous political game,” according to the Shargh newspaper.

“The main drivers are Europe and potential problems on the demand side,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by telephone today. “The S&P downgrades were well telegraphed but it sets a nervous tone for a couple of significant hurdles we have coming up, the first being the negotiations on the Greek restructuring.”

Crude for February delivery was at $98.73 a barrel, up 3 cents, in electronic trading on the New York Mercantile Exchange at 12:01 p.m. Sydney time. The contract fell 0.4 percent to $98.70 on Jan. 13, the lowest close since Dec. 21. There will be no floor trading in New York today because of the Martin Luther King Jr. holiday.

Brent oil for February settlement was at $110.81 a barrel, up 37 cents on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $12.08, compared with a record $27.88 on Oct. 14.

Europe Meetings

German Chancellor Angela Merkel and French President Nicolas Sarkozy will also meet this week as the European Central Bank warns governments against “watering down” a revamp of budget laws.

European Union foreign ministers will meet on Jan. 23 to consider barring purchases of oil from Iran as part of sanctions against the nation’s nuclear program. The country is the second- biggest producer in the Organization of Petroleum Exporting Countries after Saudi Arabia.

Nigerian union Pengassan said yesterday it will only shut down oil output as “a last resort” inAfrica’s top crude producer to give more time for negotiations with President Goodluck Jonathan’s government to end a strike in its second week. The work stoppage, which began Jan. 9, was called to protest against higher fuel prices.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore atakwiatkowsk2@bloomberg.net

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