Feb. 13 (Bloomberg) -- Oil rebounded from a three-day low in New York after Greece’s parliament approved austerity measures to secure an international bailout, easing concern Europe’s debt crisis will worsen and curb fuel demand.
Futures climbed as much as 1 percent after 199 lawmakers supported the bill in a roll-call vote shown live on state-run Vouli TV, against 74 who opposed it. The measures were needed for a 130 billion-euro ($172 billion) aid package, Greece’s second since May 2010. Oil may extend gains after companies controlling more than 100 supertankers said they would stop loading cargoes from Iran, tightening sanctions on OPEC’s second-biggest producer.
“It’s a confidence builder in terms of Greece’s willingness to implement reform,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. The oil market “has made the adjustment it needed to make from being excessively pessimistic a few months ago and has now based itself on an assumption of moderate international growth,” he said.
Crude for March delivery rose as much as $1.01 to $99.68 a barrel in electronic trading on the New York Mercantile Exchange. It was at $99.60 at 4:10 p.m. Singapore time. Futures fell 1.2 percent to $98.67 on Feb. 10, the lowest settlement since Feb. 7, and are up 17 percent from a year ago.
Brent oil for March settlement on the London-based ICE Futures Europe exchange was up 94 cents at $118.25 a barrel. The more-actively traded April contract was up 92 cents at $117.67. The European benchmark crude was at a premium of $18.65 to New York-traded West Texas Intermediate grade, compared with a record $27.88 on Oct. 14.
Overseas Shipholding Group said Feb. 10 the pool of 45 supertankers from seven owners in which its carriers trade will no longer call at Iran. Nova Tankers A/S and Frontline Ltd., with a combined 93 vessels, said Feb. 9 and Feb. 11 they won’t ship crude from the Persian Gulf nation.
The European Union’s Jan. 23 agreement to embargo Iran’s oil from July because of its nuclear program extended the ban to ship insurance. With about 95 percent of the tanker fleet insured under rules governed by European law, there will be fewer vessels able to load in Iran.
“Latest reports on Iran suggest that financial sanctions are already hitting oil production, with falls in output and exports likely to accelerate,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today. “The nation is looking to showcase its nuclear capabilities to the rest of the world in the coming days, which we think could provide additional support to oil prices in the region as tensions flare.”
Iran’s crude output dropped the most in six months by an average 30,000 barrels a day, or 0.8 percent, to 3.55 million barrels a day in January, according to a Bloomberg survey of analysts and producers. President Mahmoud Ahmadinejad said Feb. 11 he will unveil “major nuclear accomplishments” in coming days, state-run Press TV news channel reported. Iran has threatened to block shipments through the Strait of Hormuz, a transit route for about 20 percent of the world’s globally traded oil.
Passage of the austerity bill in Greece puts the spotlight on a meeting of euro-region finance ministers on Feb. 15 in Brussels to decide whether to approve the aid package. Resolution of the negotiations, which started in July, would help contain the threat that speculators will target debt- saddled countries, including Italy and Portugal.
The 27 EU member states accounted for about 16 percent of global oil demand in 2010, according to BP Plc’s annual Statistical Review of World Energy.
Hedge funds and other large speculators increased bullish wagers on oil by 4,440 contracts, or 2.2 percent, to 205,709 in the week ended Feb. 7, the U.S. Commodity Futures Trading Commission said in a weekly report Feb. 10.
--Editors: Paul Gordon, Mike Anderson
To contact the reporter on this story: Ben Sharples in Melbourne at email@example.com
To contact the editor responsible for this story: Mike Anderson at firstname.lastname@example.org