London (Platts)--1Dec2009/640 am EST/1140 GMT

Global crude futures edged higher during Tuesday morning trading with ICE Brent "approaching the top of the trading range," a trading source said.

"The situation in Iran with the hostages has certainly stirred things up a little," the source added. Five Britons were detained by Iran after their racing yacht strayed into Iranian waters last Wednesday.

At time of writing the ICE Brent contract was trading comfortably above the five-day, 10-day and 21-day moving averages, hitting an intra-day high of $79.48/barrel.

At 11:06 GMT the January ICE Brent contract traded at $79.47/barrel, a $1/b rise, the NYMEX WTI contract traded at $78.40/barrel, a $1.12/b rise. The ICE Dollar index meanwhile continued to support the complex losing 0.380 overnight points to trade at 74.499. The euro-dollar rate meanwhile traded at 1.5080.

"We have more strength to the upside with the Iranian hostage and nuclear situations. I see the Brent benchmark having the potential to break to the upside," the source added.

The WTI-Brent spread meanwhile continued to favor the ICE Brent contract. At time of writing the benchmark spread, also known as the arbitrage spread traded at minus $1.07/b. "The WTI contract is approaching some key numbers.

The WTI contract is trading at these low levels due to the recent Cushing builds. All eyes will be on the EIA (Energy Information Administration) to see if the builds continue," the source added.

Analysts polled by Platts expected a 1.3 million barrel draw in crude stocks, a 900,000 barrel build in gasoline stocks and a 450,000 barrel draw in distillate stocks in the API data released Tuesday evening. The US Energy Information Administration releases its more heavily weighted report Wednesday.

--George Johnson, george_johnson@platts.com