The Greek rescue deal is “a very good agreement,” European Central Bank President Mario Draghi said after the talks ended in Brussels. Finance ministers haggled into the night over an aid package to avoid a default that may roil financial markets. Oil has also risen this week after Iran’s oil-ministry news website Shana reported Feb. 19 that the nation will cut crude supplies to the U.K. and France.
Crude gained “on the assumption that things will probably work out for a while” in Greece, said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The situation in Iran is building some risk premium into the market.”
WTI futures for March delivery, which expire today, advanced as much as $2.20 to $105.44, the highest intraday price since May 5. The contract was at $104.92 at 3:11 p.m. in Sydney, while the more actively traded April future gained $1.66 to $105.26. Today’s trades will be booked with yesterday’s electronic transactions for settlement. Prices are 22 percent higher the past year.
Brent oil for April settlement was at $120 a barrel, down 5 cents, on the ICE Futures Europe exchange after earlier dropping as much as 45 cents. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $14.74.
European ministers were discussing a Greek debt target of 121 percent of gross domestic product by 2020 and a private- sector haircut on Greek bonds of 53 percent, according to another EU official. Private bondholders agreed to take a bigger writeoff on their Greek debt after “intense” negotiations, Italy’s finance minister Mario Monti said.
Iran’s decision to halt sales of oil to French and British buyers to preempt a European Union ban on imports will have “no impact on Britain’s energy security or supplies,” U.K. Foreign Secretary William Hague told lawmakers in London yesterday.
The U.K. got 1 percent of its crude from Iran in the first half of 2011 and France got 4 percent, according to the U.S. Energy Administration. The EU said yesterday that its member countries are cutting oil purchases from Iran and have sufficient reserves to deal with disruptions. The EU has agreed to stop purchases of Iranian crude from July 1 in an attempt to curb the Persian Gulf country’s nuclear program.
Japan’s government has yet to reach an agreement with the Obama administration over an exemption to a U.S. law that would punish banks doing business with Iran and is still negotiating over cutting Iranian oil imports, Foreign Minister Koichiro Gemba said today in Tokyo.
Hedge-funds and other money managers raised bullish bets on Brent crude by 6,818 contracts, or 7.5 percent, in the week ended Feb. 14, data yesterday from the ICE Futures Europe exchange showed.
