Oil rose in New York, trimming a third weekly drop, as investors bet that sanctions on Iran will tighten and that yesterday’s decline, the biggest this year, was exaggerated.

Crude advanced for the first time in three days after the 2.5 percent drop, the most since December. Futures rebounded after a technical indicator signaled they may have fallen too far and U.S. lawmakers introduced a bill seeking to expand sanctions on Iran. Prices have slipped this week amid rising U.S. stockpiles and speculation that western countries may tap emergency reserves.

“Any rhetoric concerning the tightening of sanctions will increase pressure on the region and as a result, you have to expect it to extend to oil prices,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “We did break below the very important support of $104 a barrel, and I think we’ve had a technical reaction on the back of that.”

Oil for May delivery gained as much as 67 cents, or 0.7 percent, to $103.45 a barrel in electronic trading on the New York Mercantile Exchange and was at $103.44 at 11:55 a.m. Sydney time. It slumped yesterday to $102.78, the lowest close since Feb. 16.

Brent oil for May settlement was at $122.80 a barrel, up 41 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded WTI was at $19.38, compared with yesterday’s close of $19.61, the widest gap in five months.

West Texas Intermediate prices are 4.6 percent higher this year, heading for a second quarterly gain. They are down 3.3 percent this week for a third weekly decline, the longest losing streak since August.

U.S. Sanctions

New York crude settled below its lower Bollinger Band for the first time in almost two months yesterday, according to data compiled by Bloomberg. This indicator is at $103.40 a barrel today. Bollinger Bands plot support and resistance levels based on volatility and are used by investors to determine entry points for buying or selling contracts.

Prices slumped yesterday after French Prime Minister Francois Fillon said consumers can “reasonably expect” a release from emergency petroleum stockpiles. Governments are closer to an agreement on the use of the reserves, he told France Inter Radio. The International Energy Agency said it’s ready to coordinate a release if there is a serious supply disruption.

Iran, the second biggest producer in the Organization of Petroleum Exporting Countries, has raised concern about supply by threatening to shut the Strait of Hormuz, a transit route for a fifth of the world’s oil, in response to sanctions.

U.S. Representatives Ted Deutch, a Florida Democrat, and Robert Dold, an Illinois Republican, introduced the Iran Energy Sector and Proliferation Sanctions Act in Congress yesterday. The measure is the latest in a stepped-up campaign to tighten sanctions aimed at depriving the Persian Gulf nation of revenue for its nuclear and missile programs.

The nuclear program is growing, breaching United Nations resolutions amid an “alarming” escalation over the country’s plans, Russian Deputy Foreign Minister Sergei Ryabkov said in an interview in New Delhi.

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 at

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