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Oil rises above US$95 after Greece gets loan
Source: Agencies |
July 5, 2011, Tuesday
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OIL edged above US$95 a barrel yesterday, bolstered by news that Greece was saved from near collapse after obtaining a vital loan installment.
By early afternoon in Europe, benchmark crude for August delivery was up 12 cents to US$95.06 per barrel in electronic trading on the New York Mercantile Exchange, with trading volumes low due to the Independence Day holiday in the US. The contract shed 48 cents to settle at US$94.94 on Friday.
Ministers from countries that use the euro common currency agreed over the weekend to pay Athens a €12 billion (US$17.39 billion) tranche of its existing €110 billion rescue package by July 15, in time to meet several bond repayment deadlines this month and next.
Europe and the International Monetary Fund will also continue to prop up Greece's struggling economy in coming years.
"That has eased concerns that Greece's debt crisis will negatively impact the economic recovery in Europe," said Victor Shum, analyst with energy consultancy Purvin & Gertz in Singapore.
It also bolstered the euro and weakened the dollar, supporting oil prices, he said. Crude is priced in US currency, so a weaker dollar makes oil cheaper for investors with other currencies.
Investors took in their stride a warning by Standard & Poor's that a proposal to get banks to share the burden of another rescue package for Greece could trigger a default. Officials have said that any proposal would seek to avoid the possibility of default.
Shum said a report showing a rebound in US manufacturing also raised hopes of strong economic growth in the world's largest oil consuming nation.
Last month's announcement of the gradual release of 60 million barrels of oil from strategic reserves by the International Energy Agency was still affecting markets, analysts said.
Speculative financial investors again cut their long positions - bets that oil prices will continue to rise - which have fallen to their lowest level in seven months, said a report from Commerzbank in Frankfurt.
This "can no doubt be attributed largely to the IEA's announcement," Commerzbank said.
In London, Brent crude for August delivery was down 2 cents to US$111.75 a barrel on the ICE Futures exchange.
In other Nymex trading, heating oil rose 0.5 cent to US$2.9295 a gallon while gasoline lost 0.91 cent to US$2.9635 a gallon. Natural gas futures shed 2.4 cents to US$4.287 per 1,000 cubic feet.
By early afternoon in Europe, benchmark crude for August delivery was up 12 cents to US$95.06 per barrel in electronic trading on the New York Mercantile Exchange, with trading volumes low due to the Independence Day holiday in the US. The contract shed 48 cents to settle at US$94.94 on Friday.
Ministers from countries that use the euro common currency agreed over the weekend to pay Athens a €12 billion (US$17.39 billion) tranche of its existing €110 billion rescue package by July 15, in time to meet several bond repayment deadlines this month and next.
Europe and the International Monetary Fund will also continue to prop up Greece's struggling economy in coming years.
"That has eased concerns that Greece's debt crisis will negatively impact the economic recovery in Europe," said Victor Shum, analyst with energy consultancy Purvin & Gertz in Singapore.
It also bolstered the euro and weakened the dollar, supporting oil prices, he said. Crude is priced in US currency, so a weaker dollar makes oil cheaper for investors with other currencies.
Investors took in their stride a warning by Standard & Poor's that a proposal to get banks to share the burden of another rescue package for Greece could trigger a default. Officials have said that any proposal would seek to avoid the possibility of default.
Shum said a report showing a rebound in US manufacturing also raised hopes of strong economic growth in the world's largest oil consuming nation.
Last month's announcement of the gradual release of 60 million barrels of oil from strategic reserves by the International Energy Agency was still affecting markets, analysts said.
Speculative financial investors again cut their long positions - bets that oil prices will continue to rise - which have fallen to their lowest level in seven months, said a report from Commerzbank in Frankfurt.
This "can no doubt be attributed largely to the IEA's announcement," Commerzbank said.
In London, Brent crude for August delivery was down 2 cents to US$111.75 a barrel on the ICE Futures exchange.
In other Nymex trading, heating oil rose 0.5 cent to US$2.9295 a gallon while gasoline lost 0.91 cent to US$2.9635 a gallon. Natural gas futures shed 2.4 cents to US$4.287 per 1,000 cubic feet.
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