By Nick Godt, MarketWatch
MUMBAI (MarketWatch) — Crude-oil futures advanced on Friday, with markets lifted by hopes global central banks stood ready to provide monetary stimulus following elections in Greece this weekend.
Crude oil for July CLN2 +0.58% delivery gained 73 cents, 0.9%, to $84.65 a barrel in electronic trade.
On Thursday, crude rose 1.6% on the New York Mercantile Exchange.
The move followed reports that the U.S. Federal Reserve and central banks from the Group of 20 nations are getting ready to provide stimulus, amid mounting concern that Greece might leave the euro zone following the result of elections on Sunday. Central banks stand ready to act
A weakening dollar also provided a lift for commodities, with the dollar index, DXY -0.14% , which measures the U.S. unit against a basket of six major currencies, down 0.1%. Euro inches up against the dollar
A global liquidity boost might lift investor sentiment, but the near-term economic prospects for Greece and the euro zone remain grim, according to Tim Evans, energy analyst at Citibank.
“In general, the economic prescription for austerity today and reform for tomorrow hasn’t turned things around, and we continue to see downside risk associated with Europe’s travails, both via a weakening euro and through weakening physical demand for oil,” Evans said.
Upside potential for oil could come from stronger seasonal demand, supported by steady production levels from the Organization of the Petroleum Exporting Countries.
On Thursday, OPEC left its production ceiling in place, citing concerns about global growth. But geopolitical concerns, including tensions with Iran, maintain the risk of upward pressure on oil prices, according to Citibank. OPEC holds production ceiling
Nick Godt is a MarketWatch reporter based in Mumbai.
