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Crude extends gains on U.S. consumer data, Iran nuclear stalemate

Published 05/27/2012, 08:34 PM
Updated 05/27/2012, 08:35 PM
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Investing.com - Crude oil futures extended Friday's gains on Monday in wake of stronger-than-expected consumer sentiment data out of the U.S. and also on a lack of progress in Iranian nuclear talks.

Polls showing increasing support for pro-bailout political parties in Greece bolstered the commodity as well.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at USD91.47 a barrel in Asian trading Monday, up 0.67%, off from a session high of USD91.48 and up from an earlier session low of USD90.98.

In the U.S. on Friday, the Thomson Reuters/University of Michigan's consumer sentiment index hit 79.3 in May, topping forecasts for 77.8.
 
Consumer spending accounts for over 70% of U.S. economic output, and the sentiment reading, the highest in more than four years, sent oil climbing, as a more robust U.S. economy will need more fuels to grow.

Meanwhile in Iraq, delegates from the U.S., U.K., China, France, and Russia and Germany hit an impasse in talks with Iranian officials to diffuse a standoff involving Iran's nuclear plans.

The West has accused Iran of enriching uranium to build nuclear weapons, a charge Iran denies, arguing its nuclear program serves the country's energy needs.

Oil prices have fallen since Iran agreed to come to the negotiating table although talks in Iraq ended last week with no results save an agreement to continue discussions in June.

Meanwhile in Greece, a series of polls lately show the mainstream New Democracy political party is rising in popularity ahead of June 17 polls.

New Democracy favors sticking with terms tied to bailout assistance, including politically unpopular measures such as tax hikes and spending cuts.

The leftist Syriza, which opposes bailout terms, has done well in the polls also, but a strong showing by New Democracy in the upcoming elections could result in a coalition government able to work on terms with European neighbors to keep Greece in the eurozone.

A messy Greek exit could rattle the European economy and send shockwaves to the U.S., slowing global economic growth in the process and crimp oil demand.

On the ICE Futures Exchange, Brent oil futures for July delivery were up 0.30% and trading at USD107.08 a barrel, up USD15.61 from its U.S. counterpart.






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