July 22 (Bloomberg) -- Crude oil gained for a fourth day on optimism that the U.S. will increase its debt ceiling and as euro-region leaders worked to convince investors that plans to contain debt crisis will be adequate.
President Barack Obama and House Speaker John Boehner, seeking to avert a U.S. default, are pursuing a broad agreement to boost the debt limit. German Chancellor Angela Merkel said government chiefs had widened the scope of their bailout fund to allow it to buy the bonds of debt-laden nations.
“The Europeans came to a deal to bail out Greece and at the same time they are moving toward a consensus to raise the debt ceiling here in the U.S.,” said Kyle Cooper, director of research for IAF Advisors in Houston. “Those are being used as somewhat positive news for oil.”
Crude for September delivery rose 54 cents, or 0.5 percent, to $99.67 a barrel at 12:25 p.m. on the New York Mercantile Exchange. Prices have gained 9.1 percent this year and 2.5 percent this week.
Brent for September settlement rose 89 cents to $118.40 a barrel on the London-based ICE Futures Europe exchange.
The euro fell 0.5 percent to $1.4349 in New York, its first decline in four days. The Standard & Poor’s index gained 0.1 percent to 1,344.51.
Oil also gained after a bomb blast in central Oslo shattered windows at the prime minister’s office and nearby buildings and killed at least one person.
“The attack in Oslo is supportive because of the uncertainty it created,” said Phil Flynn, an analyst with PFGBest in Chicago. “More than anything, the U.S. debt showdown is really dominating everything.”
Obama and Boehner, each facing strife within his own ranks and dwindling time to avert a U.S. default, pressed for a broad agreement to boost the debt limit while cutting spending by trillions of dollars and overhauling the tax code.
Negotiators are “not close to an agreement,” the speaker told reporters after meeting with rank-and-file House Republicans today. “I would suggest it is going to be a hot weekend here in Washington.”
Euro-area leaders announced 159 billion euros ($229 billion) in new aid for Greece yesterday. Merkel said government chiefs had learned from “systemic effects” in the single- currency area and widened the scope of their bailout fund to allow it to buy the bonds of debt-laden nations, support banks and offer credit lines.
’Back From Brink’
European leaders brought the region “back from the brink” as they agreed to support the new bailout package for Greece and to give new powers to the euro area’s rescue fund, said Fitch Ratings’ David Riley.
“The market has been boosted by Greek bailout euphoria, but even that was insufficient to move Brent above $120,” said Christopher Bellew, senior broker at Jefferies Bache Ltd. in London.
U.S. fuel demand rose in June as consumption of diesel by truckers reached a record high, according to the American Petroleum Institute.
Total deliveries of petroleum products, a measure of demand, climbed 2.9 percent to 22.2 million barrels a day last month from a year earlier, the industry-funded group said today in a report. Gasoline usage was almost unchanged from the year before, with all of the increase coming from other fuels.
No New Release
The U.S. and 27 allies said yesterday that they don’t plan to extend the release of emergency oil stockpiles announced through the International Energy Agency last month.
The Paris-based agency said that while it’s prepared to “augment” the sale of 60 million barrels first announced on June 23, this intervention combined with higher output from the Organization of Petroleum Exporting Countries will for now “substantially cover” the loss of exports caused by an armed conflict in Libya.
The Libyan revolt, which began in February, has reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell 50,000 barrels, or 25 percent, to 150,000 barrels a day last month, a Bloomberg News survey showed, the lowest amount in yearly data since 1962. It pumped 1.59 million barrels in January, before the uprising.
The IEA’s action was the third time the agency has coordinated the use of emergency stockpiles since it was founded in 1974. The first was during the 1991 Persian Gulf War and the second in 2005 when Hurricane Katrina struck the Gulf of Mexico.
--With assistance from Grant Smith in London, Ben Sharples in Melbourne, Ian Katz in Washington, and Simon Kennedy in Brussels. Editors: Richard Stubbe, Charlotte Porter
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