Oil prices zigzag on US growth

Oil prices see-sawed in volatile trade Tuesday, dampened by weaker-than-expected US growth data but boosted by news of a new IMF program that could potentially help Italy and Spain ward of crisis contagion. New York's main contract, light sweet crude for delivery in January, added $1.09 to $98.01 a barrel, off gains of above one dollar ahead of the US data. Brent North Sea crude for January advanced $1.81 to $109.03 in London trade. Prices started higher early on worries that the market could tighten after several Western countries announced they would step up pressure on Iran over its nuclear program. The sanctions in part target its energy industry. "Geopolitical risks are giving buoyancy to oil prices," said Commerzbank analyst Carsten Fritsch. But US prices plunged nearly two dollars after the Commerce Department sharply lowered its third quarter US growth estimate, to 2.0 percent from 2.5 percent, signaling that the economy was weaker than had been understood during the period. Then, almost as quickly as it fell, the price shot up again in parallel with the euro after the International Monetary Fund announced a new crisis loan program that in theory could help Italy and Spain ward off contagion from eurozone turmoil. "We seem to be a little bit in a battle between worries about the economy and the sovereign debt problem being offset by concerns about Iran for the sanctions," said Tom Bentz of BNP Paribas.