Crude Rises On Optimism Over Greece
U.S. crude futures rose Friday, as the dollar fell against the euro on optimism that Greece is inching toward another bailout.
Light, sweet crude for March delivery rose 99 cents, or 1%, to $103.29 a barrel on the New York Mercantile Exchange.
Brent crude, the European benchmark, remained in negative territory. The contract on ICE Futures Europe fell 34 cents, or 0.3%, to $119.77 a barrel.
Germany's government said euro-zone officials are closer to reaching a decision on a second bailout package for Greece, but final details need clarification. The comments follow a decision earlier this week by Greece's parliament to accept deep austerity measures in exchange for further aid.
"It's really just focused on how this Greek debacle is going to play out," said Matt Smith, energy analyst at Summit Energy in Louisville, Ky. "We're still not being driven by the fundamentals necessarily."
Oil market participants have been closely watching events in Greece because of fears that the country's debt could spur a broader economic crisis that could tear apart the euro zone, slow economic growth and curb demand for crude oil.
The optimism over Greece sent the dollar edging lower against the euro. The ICE Dollar Index, which tracks the dollar against a basket of currencies, was recently down 0.2% to 79.223.
A weaker dollar often strengthens crude prices by making the dollar-denominated commodity cheaper for holders of other currencies.
Positive economic data out of the U.S. on Thursday also supported prices. Weekly jobless claims fell to a nearly four-year low, while manufacturing and housing data offered an upbeat view of the economy of the world's biggest crude consumer.
Meanwhile, oil traders continued to monitor tensions between Iran and Western countries. Earlier this week, reports that Iran had cut off oil exports ahead of a July 1 European Union oil embargo sent tremors through the market and pushed Brent crude prices to a six-month high near $120 a barrel.
The reports were later denied, but the threat of an Iranian oil disruption continues to keep a floor under prices. The EU's oil embargo, combined with sanctions from the U.S., is intended to curb Iran's nuclear program, which Western nations fear is being used to develop nuclear weapons. Tehran says its program is for peaceful purposes.
Iran exports roughly 600,000 barrels of oil a day to Europe.
"Come March, we may see Iranian crude volumes flowing to Europe downscaled considerably, well ahead of the July 1 deadline agreed upon by EU decision makers in late January," said analysts at JBC Energy, a Vienna consultancy, in a research report.
Front-month March reformulated gasoline blendstock, or RBOB, recently fell 1.58 cents, or 0.5%, to $3.0313 a gallon. March heating oil fell 1.91 cents, or 0.6%, to $3.1906 a gallon.
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