FX:Crude oil edges higher on Greece hopes, China CPI weighs
Forexpros - Crude oil futures edged higher on Thursday, as sentiment remained supported amid hopes for a breakthrough on a Greek bailout deal, but an unexpected uptick in Chinese consumer prices kept gains in check.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD99.14 a barrel during European morning trade, gaining 0.45%.
It earlier rose by as much 0.5% to trade at a daily high USD99.30 a barrel. Prices hit USD100.07 a barrel on Wednesday, the highest since January 31.
Following discussions on Wednesday, Greek political leaders stopped short of signing off on austerity measures after agreeing on all points of a bailout package except on pension cuts.
Reassurance from Prime Minister Lucas Papademos that a deal could still be reached later in the day supported market sentiment and helped lift the euro to an eight-week high against the U.S. dollar.
Greece needs to finalize a debt restructuring deal by early March as part of an agreement to receive a EUR130 billion bailout package and avert a messy sovereign debt default.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, declined 0.25% to trade at 78.53. Dollar-denominated oil futures contracts tend to rise when the dollar falls, as this makes oil cheaper for buyers in other currencies.
Crude’s gains were limited after China’s National Bureau of Statistics said earlier that consumer price inflation rose by a seasonally adjusted 4.5% in January, accelerating from 4.1% in December.
Month-on-month, the consumer price index rose 1.5% in January from a month earlier, the largest monthly gain in four years.
The data dampened expectations China will ease monetary policy in the near-term to stimulate growth in the world’s second largest economy.
Meanwhile, oil traders continued to monitor tensions between Iran and the West after the Islamic Republic renewed threats to shut the Strait of Hormuz in response to the latest U.S. sanctions imposed against the country.
Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010. The threat of a major supply disruption from the country has helped support oil prices in recent weeks.
Oil traders were also awaiting forecasts for global oil demand from the Organization of Petroleum Exporting Countries due later in the day and from the International Energy Agency on Friday.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery added 0.52% to trade close to a six-month high of USD117.81 a barrel, with the spread between the Brent and crude contracts widening to USD18.67 a barrel.
The spread had widened to more than USD20 per barrel on Tuesday, the 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.
