Oil rose for a second day in New York, paring its fourth weekly decline, as support among European Union leaders for joint euro-area bonds fueled speculation that the bloc can resolve its debt crisis. West Texas Intermediate futures advanced as much as 0.7 percent. Most of the EU leaders at a summit in Brussels this week backed the idea of issuing common euro-area debt, and Italy can help persuade Germany to support Europe’s “common good� as well, Italian Prime Minister Mario Monti said. Iran, OPEC’s second-biggest crude producer, and world powers decided yesterday they will meet again in June after they were unable to negotiate a deal on the nation’s nuclear program. “We are getting a technical bounce after several oversold sessions, but risk aversion still remains in the driver seat,� said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London. “While forward fundamentals suggest a floor around current levels, the direction for oil prices in the lead-up to the next Greek elections in mid-June remains skewed to the downside.� Crude for July delivery gained as much as 66 cents to $91.32 a barrel in electronic trading on the New York Mercantile Exchange, and was at $91.07 at 11:25 a.m. London time. The contract increased yesterday 0.9 percent to $90.66. Prices are down 0.4 percent this week and 7.9 percent this year. Brent oil for July settlement rose 37 cents to $106.92 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $15.85, compared with $15.89 yesterday. Stronger Euro The euro rose from a 22-month low against the dollar, advancing 0.5 percent to $1.2589. Italy’s Monti said in an interview on Italian television station La7 yesterday that he can help bring Germany round to acting in Europe’s “common good� and that “Europe can have euro bonds soon.� Germany has an interest in ensuring no country leaves the euro, and Greece will probably remain in the 17-nation currency union, he said. “The possible easing of Germany’s stand towards a ‘growth pact’ and a stronger euro are supporting the prices,� said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “However, the risks to the downside are still high since the sentiment is likely to stay downbeat and the hopes to be disappointed yet again.� Negative Technical Momentum Oil may extend its decline in New York as an indicator of long-term technical momentum has turned negative, according to data compiled by Bloomberg. On the weekly chart, the moving average convergence-divergence line is below zero for the first time since November. Crude has technical support at $89.93 a barrel, the 50 percent Fibonacci retracement of the slide to $32.40 in December 2008 from an intraday record high of $147.27 in July that year. Twenty of 37 analysts, or 54 percent, forecast oil will drop through June 1, a Bloomberg survey showed. Ten respondents, or 27 percent, predicted an increase and seven estimated prices will be little changed. Chinese, French, German, Russian, British and U.S. negotiators will meet their Iranian counterparts for a third time this year on June 18 to June 19 in Moscow, according to Catherine Ashton, the EU’s foreign policy chief. Iran went into two days of negotiations in Baghdad that ended yesterday seeking relief from financial, trade, insurance and energy-related sanctions imposed by the West to curb the country’s nuclear program. The Persian Gulf nation has threatened to shut the Strait of Hormuz, a transit route for a fifth of the world’s crude, in response to an embargo. It produced an average of 3.3 million barrels a day of oil in April, according to estimates compiled by Bloomberg. Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, pumped 9.8 million a day. -- Editors: John Buckley, Rachel Graham To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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