June 21 (Bloomberg) -- Oil advanced for a second day in New York as concern eased that Greece will default on its debt and investors bet a report will show U.S. crude stockpiles dropped for a third week.
Futures climbed as much as 1.1 percent after Luxembourg’s Prime Minister Jean-Claude Juncker said his Greek counterpart assured him the government would do everything to ensure financial aid. Mirae Asset Securities Ltd. raised its Brent price forecasts by 15 percent as fighting in Libya continued to disrupt supplies. An Energy Department report tomorrow may show U.S. crude inventories fell for a third week, according to the median of 12 analyst estimates in a Bloomberg News survey.
“There’s a little bit of optimism leading back into the market and the chances are that the Greece concerns will probably be solved some way,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted prices will average $100 a barrel this year. “We feel oil is due for a bit of a bounce.”
Oil for July delivery rose as much as 98 cents to $94.24 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.15 at 3:06 p.m. Singapore time. The contract, which expires today, climbed 25 cents to $93.26 yesterday. The more actively traded August future gained 87 cents to $94.50 today.
Crude is up 21 percent the past year. New York futures have dropped 17 percent from the 2011 settlement high of $113.93 on April 29. A 20 percent decline is typically considered to be a “bear market.”
Oil yesterday fell below its lower Bollinger Band, a technical signal that prices may have declined too far. The contract also slid below its 200-day moving average of $92.30 a barrel, a level that can attract buyers, supporting prices.
Brent oil for August delivery was at $112.20 a barrel, up 51 cents, on the London-based ICE Futures Europe exchange. The contract yesterday fell $1.52, or 1.3 percent, to $111.69. Prices have advanced 42 percent the past year.
Greece’s cabinet faces a confidence vote in parliament today. Prime Minister George Papandreou is seeking the “widest possible” consensus for a medium-term budget plan, he told reporters yesterday after meeting European Commission President Jose Barroso in Brussels. European Union leaders have insisted he secure multi-party support for austerity measures that are a condition of the aid needed to avoid default as soon as next month.
Mirae Asset Securities raised its average Brent crude forecasts for 2011, 2012 and 2013 by 15 percent to $115 a barrel on the “sustained loss” of Libyan oil supplies, according to a report e-mailed today. Production in the North African country has been cut by almost 90 percent since fighting broke out between rebel forces and troops loyal to leader Muammar Qaddafi.
U.S. inventories dropped 1.63 million barrels, or 0.4 percent, to 363.9 million in the seven days ended June 17, according to the analysts surveyed before the Energy Department’s report tomorrow. Nine of the respondents forecast a decline, two projected a gain and one said there was no change. The industry-funded American Petroleum Institute will report its own data today.
The third weekly decrease in U.S. crude supplies would be the longest stretch of declines this year, reflecting an increase in gasoline output to the highest level in nine months. Refineries probably operated at 86.6 percent of capacity last week, up 0.5 percentage point from the prior week, the survey showed.
--Editors: Paul Gordon, Alexander Kwiatkowski
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