LONDON—Crude futures continued to climb Wednesday, as optimism ahead of Greece's austerity vote buoyed the euro.
Late morning, the euro was at $1.4422 up from $1.4371 late Tuesday in New York.
The stronger euro supported crude, which tends to climb when the dollar is weak as the commodity becomes cheaper for holders of other currencies.
Analysts predict trade will be volatile as investors eye headlines out of Athens. Approval of austerity measures needed for a bailout by the International Monetary Fund and the European Union is largely seen as already priced in, but if the package is rejected a sharp slump is predicted.
Price moves Wednesday "depend very much on what happens in Greece. That will be very important," said Thina Saltvedt, senior oil market analyst at Nordea Bank Norge.
Expecations that Greece will approve the austerity package helped oil prices to rally $2.00 a barrel on Tuesday. The market has now retraced a substantial portion of the losses made since the International Energy Agency made its surprise announcement that it plans to release 60 million barrels of oil into the market in the next month.
However, the IEA's plan could still put a cap on prices as attention turns to U.S. oil inventory data later Wednesday.
The U.S. Department of Energy is set to release its report on oil and fuel stocks in the week ending June 24 on Wednesday.
The data are closely watched as an indication of demand for crude in the world's largest oil consumer.
The American Petroleum Institute, an industry trade association, said its own survey, released late Tuesday, showed crude stocks falling 2.7 million barrels last week. Gasoline stocks were flat, while distillate inventories fell 900,000 barrels, the API said. Refinery runs were unchanged at 86.5% of capacity.
Declining stocks usually paint a bullish picture for oil, but in light of the IEA stock release some analysts are skeptical about how much inventory reductions will support prices.
