Forexpros - Crude oil futures were up on Tuesday, hovering just below the previous day’s nine-month high after European officials approved a much-needed EUR130 billion bailout package for Greece, while lingering fears over a disruption to Iranian oil exports continued to underpin prices. On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD104.96 a barrel during European morning trade, gaining 1.25%. The March contract is due to expire at the end of Tuesday’s trading session. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios. Meanwhile, the more actively traded contract for April delivery rallied 1.74% to trade at USD105.41 a barrel. On Monday prices spiked to USD105.80, the highest since May 5, 2011. At a meeting that lasted into the early of hours of Tuesday, euro zone finance ministers agreed on a EUR130 billion deal slated to reduce Greece's debt to 120.5% of gross domestic product by 2020. Private-sector creditors also agreed to take a write-down on their bonds of 53.5%, more than the 50% write-down that had been conceded before the meeting, which is expected to cut Greece's debt by EUR107 billion. The decision will help Athens resolve its immediate payment needs and avert a sovereign debt default. Euro zone developments have dominated trading in the oil market for the last several months, with prices broadly tracking investor sentiment toward the region’s ongoing debt crisis. Meanwhile, prices continued to draw support from growing concerns over a disruption to Iranian oil exports. A day after Tehran said it halted crude shipments to British and French companies, the head of Iran’s state oil company said if other European nations continued “hostile acts,� it would stop exporting oil to them as well The pre-emptive sales embargo by Iran comes in response to tighter sanctions on the country after European Union states agreed in late January to stop importing Iranian crude from July 1. Growing tensions between Iran and Israel also remain in focus. There are fears that an escalation of hostilities between Israel and Iran could set off a conflict across the region and send oil prices skyrocketing. Iran is the world’s third largest oil exporter, after Saudi Arabia and Russia. The threat of a major supply disruption from the country has helped support oil prices in recent weeks. Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery eased up 0.1% to trade at USD120.17 a barrel, with the spread between the Brent and crude contracts standing at USD14.76.

Source