NEW YORK: Oil climbed
after the Greek parliament’s approval of an austerity plan bolstered
chances for a solution to Europe’s debt crisis and on increasing concern
that Iranian crude supplies will be disrupted. Futures rose as much as
2%, the euro strengthened and the global equity market advanced after
passage of the package needed for 130 billion-euro ($172 billion ) in
aid.
Crude may extend gains after companies controlling more than 100
supertankers said they would stop loading cargoes from Iran, tightening
sanctions on OPEC’s second-biggest producer. “The approval of the Greek
austerity measures gave the euro a boost and sent equities higher,” said
Chris Dillman, an analyst and broker at Tradition Energy in Stamford,
Connecticut.
“The news that shippers will stop loading
Iranian cargoes is also driving the market higher.” Crude for March
delivery increased $1.41, or 1.4%, to $100.08 a barrel on the New York
Mercantile Exchange. Futures are up 17% from a year ago. Brent oil for
March settlement rose 90 cents, or 0.8%, to $118.21 a barrel on the
London-based ICE Futures Europe exchange.
Passage of the austerity bill in Greece puts the spotlight on a
meeting of euroregion finance ministers on February 15 in Brussels to
decide whether to approve the aid package. Resolution of the
negotiations , which started in July, would help contain the threat that
speculators will target debt- saddled countries, including Italy and
Portugal.
“This won’t fix Greece but it does buy time,” said Bill O’Grady ,
chief market strategist at Confluence Investment Management in St.
Louis. “This time should be used to come up with an exit strategy for
countries to leave the euro zone in a controlled fashion.”
The 27 EU member states accounted for about 16% of global oil demand
in 2010, according to BP Plc’s annual Statistical Review of World
Energy. The Standard & Poor’s GSCI Index of 24 raw materials climbed
as much as 1.1%. A stronger euro and falling dollar bolsters the appeal
of commodities as an alternative investment. “The problem is resolved
for the time being and we can buy risk assets again,” O’Grady said.
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