Oil advanced for a second day in New York as concern eased that Greece will default on its debt and disrupt the region’s economy, and before a report that may show U.S. crude stockpiles dropped for a third week. Futures rose as much as 0.8 percent after Luxembourg’s prime minister, Jean-Claude Juncker, said Greek Prime Minister George Papandreou assured him the government would do everything to ensure financial aid. Oil also increased after technical indicators signaled prices may have declined too far. An Energy Department report tomorrow may show U.S. crude inventories fell dropped 1.63 million barrels last week, according to the median of 12 analyst estimates in a Bloomberg News survey. “There’s a little bit of optimism leading back into the market and the chances are that the Greece concerns will probably be solved some way,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 a barrel this year. “We feel oil is due for a bit of a bounce.” Oil for July delivery rose as much as 74 cents to $94 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.45 at 12:25 p.m. Sydney time. The contract, which expires today, climbed 25 cents to $93.26 yesterday. The more actively traded August future gained 7 cents to $93.70 today. Crude is up 20 percent the past year. Futures have dropped 18 percent from the 2011 settlement high of $113.93 on April 29. A 20 percent decline is typically considered to be an indicator of a bear market. Technical Indicators Oil yesterday fell below its lower Bollinger Band, a technical indication that prices may have declined too far. The contract also slid below its 200-day moving average of $92.30 a barrel, a level which can attract buyers and support the price. Brent oil for August delivery was at $111.34 a barrel, down 35 cents, on the London-based ICE Futures Europe exchange. The contract yesterday fell $1.52, or 1.3 percent, to $111.69. Prices are up 41 percent the past year. Greece’s cabinet faces a confidence vote in parliament today. Papandreou is seeking the “widest possible” consensus for a medium-term budget plan, he told reporters yesterday after meeting European Commission President Jose Barroso in Brussels. European Union leaders have insisted he secure multi-party support for austerity measures that are a condition of the aid needed to avoid default as soon as next month. “The Greek parliament has to know that this has to be done,” Juncker, who leads the group of euro-area finance ministers, told reporters in Luxembourg. Oil Stockpiles The third weekly decrease in U.S. crude inventories would be the longest stretch of declines this year, as refineries raise gasoline output to the highest level in nine months to meet demand. Refineries probably operated at 86.6 percent of capacity last week, up 0.5 percentage point from the prior week, the survey showed. Saudi Arabia and the three other Persian Gulf states in the Organization of Petroleum Exporting Countries who pledged on June 8 to increase supplies will be “cautious” in raising output to avoid weakening prices, according to the Centre for Global Energy Studies. CGES, a non-profit think tank founded by former Saudi Arabian Oil Minister Sheikh Ahmad Zaki Yamani, forecast OPEC members will provide an average of 29.6 million barrels a day during the third quarter, less than the 30.9 million that the group estimates is needed. Kuwait’s crude output capacity is 3.2 million barrels a day and the country’s policy is not to oversupply the market, Mohammad Al-Busairy, the country’s oil minister, said in an interview on Al-Arabiya television yesterday. The country is currently producing 2.55 million to 2.7 million barrels a day, which is “what Kuwait’s clients need,” Busairy said. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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