OIL FUTURES: Crude Edges Higher As Greece Worries Ease
May 21 2012 - 10:12AM
Dow Jones News
Oil futures edged higher Monday, snapping a six-session losing
streak, as Greece's imminent exit from the euro looked less likely
and fears of a broader crisis in the currency zone eased
slightly.
Light, sweet crude for June delivery rose 28 cents, or 0.3%, to
$91.76 a barrel on the New York Mercantile Exchange. Brent crude on
ICE Futures Europe rose 81 cents, or 0.8%, to $107.95 a barrel.
Broader markets, including European equities, were higher after
the Group Of Eight industrialized nations affirmed over the weekend
that they support Greece remaining in the euro zone.
Meanwhile, Greece's conservatives gained ground in weekend
polls, suggesting that the country could produce a government that
meets Europe's terms for remaining in the single currency.
In China, comments from Premier Wen Jiabao raised expectations
that additional stimulus measures could be on the horizon, which
could further power economic growth in the world's second-biggest
oil consumer.
"Given the fears surrounding Europe and the possible exit from
by Greece from the euro, these words have been accepted by markets
like a comfort blanket," said Matt Smith, analyst at Summit Energy
in Louisville, Ky.
Oil futures have retreated sharply over the last week, weighed
in large part by fears that political turmoil in Greece could force
the country to exit the euro zone, touching off a broader crisis
that puts the entire currency union in jeopardy and ultimately
weighing on economic growth and oil demand.
Meanwhile, cooling tensions with Iran have also fed the recent
sell-off. On Wednesday, Tehran is set to meet in Baghdad with
delegations from the five permanent members of the United Nations
Security Council, plus Germany, to continue discussions over its
nuclear program.
The summit follows last month's meeting in Istanbul, and is
offering hope that a diplomatic solution to the nuclear stand-off
is viable. Western countries worry that Iran is developing nuclear
technology to build a bomb, while Tehran claims its program is for
peaceful purposes.
Still, several analysts have noted that prices could easily
rebound if conflict with Iran again looks likely. The European
Union is set to fully implement an oil embargo on Iran starting
July 1.
"The money has kind of exited the market and it's waiting for
the next big thing to hit," said Carl Larry, head of the trading
advisory firm Oil Outlooks and Opinions.
Front-month June reformulated gasoline blendstock, or RBOB,
recently rose 3.01 cents, or 1%, to $2.9196 a gallon. June heating
oil advanced 1.81 cents, or 0.6%, to $2.8481 a gallon.
-By Dan Strumpf, Dow Jones Newswires; 212-416-2818;
dan.strumpf@dowjones.com.