💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Brent stays above $112 after Greece vote, tighter U.S. stocks

Published 06/29/2011, 11:13 PM
Updated 06/29/2011, 11:16 PM

* U.S. crude stocks fell more than expected

* IEA to decide on release of more oil stocks in July

* Coming Up: U.S. weekly unemployment claims at 1430 GMT

By Florence Tan

SINGAPORE, June 30 (Reuters) - Brent held above $112 on Thursday buoyed by tighter oil stocks in the United States while Greece passed an austerity plan, moving a step closer to avoiding a sovereign debt default.

Concerns that the International Energy Agency may decide next month to release more oil from strategic reserves capped gains.

ICE Brent crude for August fell 1 cent to $112.39 a barrel, by 0255 GMT after jumping more than 3 percent on Wednesday.

U.S. August crude was at $95.10 a barrel, up 33 cents, after gaining 2 percent. Both contracts reached their highest close since June 22 and are headed for their second straight monthly decline.

Brent's premium to U.S. light sweet crude stayed wide at more than $17.

The International Energy Agency has sent a bearish signal to the market by releasing emergency oil stocks in a "fairly well-supplied market", said Ben Westmore, commodities economist at the National Australia Bank.

"The market is still assessing the release of emergency stocks by the IEA," he said. "The IEA has shown that it is ready to step in to meet coverage."

The energy watchdog shocked the oil markets last week when it announced a plan to release 60 million barrels from emergency stockpiles over an initial 30 days to fill the gap in supplies left by the disruption to Libya's output.

The agency could decide whether to repeat the release around the third week of July, Richard Jones, deputy executive director of the IEA, said late on Wednesday.

U.S. STOCKS TIGHTEN

In the United States, oil stocks tightened as crude imports fell while gasoline inventories fell unexpectedly.

U.S. crude stockpiles fell last week for a fourth week, government data showed, dropping 4.4 million barrels, much more than forecast, to 359.5 million barrels. Gasoline inventories declined 1.4 million barrels to 213.2 million barrels, against the forecast for a small increase.

Oil stocks are now 10.86 million barrels below the seasonal peak in the five-year average on May 6, MF Global analysts said in a note.

"That compares to a decline of 6.84 million barrels in the five-year average and reverses a point of fundamental weakness which has been applied to oil prices in recent weeks," they said.

Investors will also be watching the North Atlantic hurricane season more closely than last year when inventories were still high, Westmore said.

"Any sort of disruption would have a bigger impact that a year ago," he said.

(Reporting by Florence Tan; Editing by Ed Lane)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.