Oil rises above $95 after Greece gets loan tranche
Monday, July 4, 2011
KUALA LUMPUR, Malaysia (AP) — Oil edged above $95 a barrel Monday in Asia, bolstered by news that Greece was saved from near collapse after obtaining a vital loan installment.
Benchmark crude for August delivery was up 23 cents to $95.23 per barrel at late afternoon in Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract shed 48 cents to settle at $94.94 on Friday.
In London, Brent crude for August delivery was down 24 cents to $111.53 a barrel on the ICE Futures exchange.
Ministers from countries that use the euro common currency agreed over the weekend to pay Athens a euro 12 billion ($17.39 billion) tranche of its existing euro 110 billion rescue package by July 15, in time to meet several bond repayment deadlines this month and next. Europe and the International Monetary Fund will also continue to prop up Greece's struggling economy in coming years.
"That has eased concerns that Greece's debt crisis will negatively impact the economic recovery in Europe," said Victor Shum, analyst with energy consultancy Purvin & Gertz in Singapore.
It also bolstered the euro and weakened the dollar, supporting oil prices, he said. Crude is priced in U.S. currency, so a weaker dollar makes oil cheaper for investors with other currencies.
Shum said a report showing a rebound in U.S. manufacturing also raised hopes of strong economic growth in the world's largest oil consuming nation.
He said trading was thin due to the Independence Day holiday in the U.S. but expects the oil price to gradually rise up to $100 a barrel if economic news remain positive.