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Oil rebounds above $95 amid Greece debt fears

Oil rebounds above $95 amid Greece debt fears

June 16th, 2011 by ALEX KENNEDY, Associated Press in News

SIGNAPORE (AP) - Oil prices rose to above $95 a barrel Thursday in Asia, reversing slightly after big losses sparked by Europe's deepening debt crisis and a stronger U.S. dollar.

Benchmark oil for July delivery was up 59 cents to $95.40 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $4.56 to settle at $94.81 on Wednesday.

In London, Brent crude for August delivery was up 87 cents to $113.88 a barrel on the ICE Futures exchange.

Violent protests in Greece on Wednesday over proposed austerity measures spooked traders and helped strengthen the dollar against the euro, making dollar-based commodities such as oil more expensive for investors with other currencies.

The euro fell to $1.4151 on Thursday from $1.4165 late Wednesday.

Moody's ratings service said it may downgrade three big French banks that face losses on Greek bonds, fueling concern that financial panic could spread to other financially troubled European countries like Spain, Portugal and Ireland.

"This situation could be highly destabilizing not only for Europe but also for the global economy," said Richard Soultanian of NUS Consulting. "The events unfolding in Europe may not only further dampen global demand, but also weaken speculation which has been supporting prices above current fundamental levels."

Soultanian said he expects crude to trade in the mid-$80s at the end of this year.

Crude rose from $84 in February to near $115 early last month amid political upheaval in the oil-rich Middle East and North Africa. Oil has fallen from $102 late last week.

In other Nymex trading in July contracts, heating oil gained 3.1 cents to $3.02 a gallon while gasoline gained 4.2 cents at $2.96 a gallon. Natural gas futures advanced 0.5 cents at $4.58 per 1,000 cubic feet.