FX:Crude oil climbs to 1-week high on U.S. demand, Greece hopes
Forexpros - Crude oil futures were up for a second day on Wednesday, trading at a one-week high as concerns over a slowdown in U.S. oil demand eased, while hopes for a breakthrough on an agreement for a second Greek bailout provided further support.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD99.44 a barrel during European morning trade, climbing 1.05%.
It earlier rose by as much 1.12% to trade at USD99.49 a barrel, the highest since January 31.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 4.5 million barrels last week, confounding market expectations for a 2.4 million barrel increase.
Oil traders were looking forward to the U.S. Energy Information Administration’s more closely-watched weekly report on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The report was expected to show that U.S. crude oil stockpiles rose by 2.5 million barrels last week, while gasoline supplies were forecast to increase by 0.5 million barrels.
Meanwhile, markets continued to eye developments out of Greece amid indications that Greek political leaders were moving closer to an agreement on a debt swap deal with private creditors.
Greece needs to finalize a debt restructuring deal by early March as part of an agreement to receive a EUR130 billion bailout package.
The euro rose to an eight-week high against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.1% to trade at 78.51.
Dollar-denominated oil futures contracts tend to rise when the greenback weakens, as this makes oil cheaper for buyers in other currencies.
Meanwhile, oil traders continued to monitor tensions between Iran and the West. Iranian lawmakers are pushing a plan to halt crude exports to Europe before the European Union begins an oil embargo this summer.
"As tensions between Iran and the West escalate, the risk to crude oil prices is becoming increasingly skewed to the upside," Goldman Sachs said in a report.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery added 0.33% to trade at USD116.61 a barrel, with the spread between the Brent and crude contracts narrowing to USD17.17 a barrel.
The spread had widened to more than USD20 per barrel on Tuesday, its highest since October.
Brent prices have outperformed crude in recent sessions amid concerns over a disruption to supplies from African producers, Nigeria and South Sudan, as well as a spell of freezing weather in Europe.
