Oil prices rose slightly in the first week of January, as bearish US stock data was balanced by global alarm at Iran's resumption of nuclear research. Spot Brent was trading at $62.05 a barrel on 11 January, compared with $61.57 a barrel a week earlier.

Tehran made good on its statement of intent to go ahead with nuclear research by breaking the seals at the Natanz facility on 10 January. The move will intensify tension with the US and the rest of the international community, which is rapidly losing patience with President Ahmadinejad. 'There are elements within the Iranian government that see the oil market situation as an insulation that allows them to push harder,' says Paul Horsnell of Barclays Capital. 'With other countries tied down in Iraq, and with the oil market existing on a wafer of spare capacity, that faction argues that the consequences of any interruption of Iranian exports could be so severe as to lead others [in the international community] to shy away from any meaningful response.'

Better news for the market came from the US, where key consuming regions continue to enjoy an unseasonably mild winter. The warm weather has dampened demand for heating oil, allowing stocks to accumulate. The latest inventory data, released on 11 January, showed distillate stocks building by 3.8 per cent to 133.8 million barrels in the week to 6 January, up 6.6 per cent year on year. Crude supplies fell by 0.9 per cent to 318.7 million barrels, but are 11.4 per cent higher than a year before.