Oil prices steady after Greek-bounce

30th June 2011, Comments 0 comments

World oil prices steadied on Thursday after soaring the previous day on easing concerns over Greece and signs of strengthening energy demand in the United States.

Brent North Sea crude for delivery in August fell 43 cents to $111.97 in late London trading, having shot up by $3.62 the previous day.

New York's main contract, West Texas Intermediate for August, gained 22 cents to $94.99 a barrel.

"We could say that the markets look a bit relieved... but trading conditions are likely to remain fairly volatile for the short-term," said Sucden brokers analyst Myrto Sokou.

Crude futures had surged on Wednesday after a vote in the Greek parliament eased worries about a destabilising default, while new data from the United States showed that US crude inventories had fallen.

The rally came after Greek lawmakers approved an unpopular austerity plan demanded by international creditors, staving off the threat of a default that could have knock-on effects throughout the eurozone.

The news cheered investors and caused the European single currency to rise against the dollar, which in turn buoyed the price of oil, analysts said.

Greek lawmakers meanwhile voted through the details of the fresh austerity measures on Thursday, but objections from all sides on parts of the plan served notice of fresh rows ahead after days of rioting in Athens.

The oil market has regained most of the ground it lost after last Thursday's surprise announcement by the International Energy Agency that it was tapping strategic reserves to make up for lost Libyan output.

Separately on Wednesday, official data showed that US crude oil inventories fell by 4.4 million barrels last week, exceeding market expectations for a drop of 1.6 million barrels.

Falling oil inventories in the United States, the world' largest economy, indicate that US demand for energy is on the rise.

The United Arab Emirates on Wednesday criticised OPEC's decision not to hike oil production and said it doubted the effectiveness of major consumers drawing down their strategic reserves.

Earlier this month, the 12-nation Organization of the Petroleum Exporting Countries (OPEC) -- which pumps 40 percent of global oil supply -- decided to leave its official output target at 24.84 million barrels per day.

The decision sent crude prices shooting higher on global markets and exposed deep divisions in the cartel amid calls for a hike in quotas.


© 2011 AFP

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