Brent still above $ 120 on Friday on persistent supply concerns with major European customers cut purchases of Iranian crude oil and the hope for a surge in demand as Greece edged closer to a bailout deal.
Top European buyers of Iranian oil are substantial cuts over the offer for the European Union sanctions to finance their purchases gets harder, which flows to the continent in March by more than one third, or more than 300,000 barrels per day. Growing optimism that Greece finally enough for a second bailout to secure after it included additional budget savings made also reinforced sentiment on crude oil.
Front-month April Brent crude oil futures by 17 cents to $ 120.28 at 0314 GMT, after trading as high as $ 120.63. U.S. crude oil does not keep pace with the movement in Brent, tapping at five cents to $ 102.36, with the premium of Brent crude oil over U.S. expansion to nearly $ 18. CL-LCO1 = R
“Brent responds to a combination of things, including persistent optimism about Greece, a weaker dollar and the market focused on reduced exports from Iran to Europe,” said Jonathan Barratt, chief executive of Barratt’s Bulletin.
The euro rose against the dollar as a Greek band hopes to swap might be within reach lifted investor sentiment and risk tolerance.
The expectation that eurozone finance ministers will sign a bailout deal for Greece on Monday increased after a proposal to use part of the rescue plan to keep until after the Greek elections expected in April was put down.
In a sign of an emerging agreement, the national central banks in the currency bloc would hold Greek bonds to exchange this weekend in the run up to the private sector debt deal to prevent forced losses, eurozone sources have said.
“The European financial meeting on Monday will be the main drivers of oil prices,” said Ken Hasegawa, a commodity derivatives manager with brokerage Newedge in Tokyo.
“Technically I am expecting a healthy correction in Brent, with some Proft taking the sale after the meeting.”
POSITIVE U.S. data
Upbeat data from the U.S. shows a decline in jobless claims indicates a possible recovery in the labor market pushed crude oil prices.
The first applications for state unemployment benefits fell 13,000 to a seasonally adjusted 348,000, up to a nearly four-year low last week, below economists’ prediction of the rise to 365,000 claims.
Uncertainties about Iran and problems faced by other countries in the Middle East and Africa, but remains positive news overshadowed U.S., analysts said.
“The situation in Libya, Nigeria, Syria, Sudan and Iran are more related to Brent instead of WTI,” said Hasegawa.
He added that the Iran issue will dominate the oil until it is resolved, keeping Brent prices above $ 110.
source:reuters
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