Oil Declines From Five-Week High In New York After Greek Bailout Delayed
Oil fell from a five-week high in New York as European leaders pushed back a bailout for Greece, heightening concern that the region’s debt crisis will damage economic growth and curtail fuel consumption.
Europe’s creditor countries struggled to reach an agreement over a rescue of Greece, seeking more control over how future aid is spent as the country faces the threat of default over a bond payment due on March 20. Iran stopped crude exports to France and the Netherlands and threatened to end shipments to four other European countries, state-run Mehr reported yesterday, citing an unidentified official at the National Iranian Oil Co.
“Yet another postponement of the Greek deal is creating some risk-off” said Thorbjorn Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark. “Yesterday’s news fromIran was bullish, but not bullish enough to justify a rally. It is still rumors and speculation.”
Oil for March delivery fell as much as 78 cents, or 0.8 percent, to $101.02 and was at $101.11 a barrel in electronic trading on the New York Mercantile Exchange at 9:14 a.m. London time. The contract yesterday increased $1.06 to $101.80, the highest close since Jan. 10. Prices are 19 percent higher than a year ago.
Brent oil for April settlement fell 61 cents to $118.32 a barrel on the ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate for the same month was at $17.59, compared with $16.79 yesterday. It reached a record of $27.88 on Oct. 14.
The state-run Fars news agency gave a conflicting account to the Mehr report, saying Iran warned the six European Union nations without cutting exports to any of them. An Iranian oil ministry official, declining to be identified, said yesterday he was unable to confirm a decision to suspend shipments. The EU also said it wasn’t immediately able to confirm a halt.
“If any military action against Iran is taken, it poses a huge risk to oil supplies and should raise the fear premium inoil prices even further,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. inMelbourne, said in a note today. Data from the U.S. Energy Department “was surprisingly supportive, with crude stocks showing an unexpected decline.”
U.S. stockpiles fell 171,000 barrels last week, data from the Energy Information Administration showed. They were projected to rise 1.5 million barrels, according to a Bloomberg News survey.
Gasoline stockpiles rose 400,000 barrels last week, figures from the EIA showed. They were projected to climb 700,000 barrels, according to the median of 13 analyst estimates in the Bloomberg News survey. Distillate supplies, a category that includes diesel and heating oil, fell 2.9 million barrels compared with an estimate for a 1.1 million barrel drop.
Oil in New York has technical resistance along the upper Bollinger Band, near where futures halted yesterday’s advance, according to data compiled by Bloomberg. This indicator is at about $102.66 a barrel today. Sell orders tend to be clustered close to chart-resistance levels.