Bloomberg News

Oil Rises on Euro-Bond Speculation to Trim Weekly Drop

May 25, 2012

Oil headed for a fourth weekly decline in New York on concern that European Union leaders are failing to arrive at a solution for the bloc’s debt crisis.

West Texas Intermediate was little changed, giving up an earlier advance of as much as 0.7 percent. U.S. stock-index futures extended losses, signaling the Standard & Poor’s 500 Index will trim a weekly gain, and the euro gave up gains against the dollar amid concern that Spain’s regional governments will lose access to capital markets. Iran, OPEC’s second-biggest crude producer, and world powers decided yesterday they will meet again in June after they were unable to negotiate a deal on the nation’s nuclear program.

“Risk aversion still remains in the driver seat,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London. “While forward fundamentals suggest a floor around current levels, the direction for oil prices in the lead-up to the next Greek elections in mid-June remains skewed to the downside.”

Crude for July delivery was at $90.71 a barrel, 5 cents higher in electronic trading on the New York Mercantile Exchange at 1:40 p.m. London time. It had gained as much as 66 cents to $91.32 a barrel. Prices are down 0.8 percent this week and 8.2 percent this year.

Brent oil for July settlement rose 27 cents to $106.82 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $16.10, compared with $15.89 yesterday.

The euro slipped 0.1 percent to $1.2516 after Spain’s Deputy Prime Minister Soraya Saenz de Santamaria said the government is analyzing “with all caution” requests from regional governments to help them regain access to capital markets.

-- Editors: John Buckley, Rachel Graham

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus