Oil traded near a three-month high in New York as signs that Greece may secure a financial rescue package countered speculation that Italy will fail to pass its budget and worsen the region’s sovereign debt crisis.
Futures were little changed after climbing as much as 0.7 percent. Greek Prime Minister George Papandreou agreed to step down to allow the creation of a unity government to receive international aid and avert a collapse of the country’s economy. Italy’s parliament votes tomorrow on the 2010 budget report as Prime Minister Silvio Berlusconi’s majority unravels and borrowing costs surge. London-traded Brent crude’s premium to West Texas Intermediate widened.
“The market has got to be a little bit optimistic and it might take us through $95.20,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “If it doesn’t break through this level it’ll probably suggest oil will trade lower rather than higher. It’s a bit expensive at these levels given the news out there.”
Oil for December delivery increased as much as 70 cents to $94.96 a barrel in electronic trading on the New York Mercantile Exchange and was down 27 cents at $93.99 at 4:18 p.m. Beijing time. The contract advanced 19 cents, or 0.2 percent, to $94.26 on Nov. 4, the highest since Aug. 1.
Crude in New York gained for a fifth week in the seven days ended Nov. 4, the longest rising streak since the period ended April 3, 2009. Prices are 2.9 percent higher the past year.
Brent oil for December settlement gained 9 cents, or 0.1 percent, to $112.06 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $18.07 to New York crude, compared with $17.71 on Nov. 4 and a record settlement of $27.88 on Oct. 14.
Oil prices have gained amid signs the global economy may withstand Europe’s debt crisis. The U.S. unemployment rate fell to 9 percent last month, the lowest since April, the Labor Department reported Nov. 4. Chinese manufacturing continued to expand in October, based on an index compiled by the China Federation of Logistics and Purchasing.
European finance chiefs will meet in Brussels today to work on details of a plan to bulk out the region’s bailout fund. Investor concern that Italy will struggle to cut the region’s second-biggest debt load sent the yield on the nation’s 10-year bond to about 6.4 percent on Nov. 4. Two Berlusconi allies defected to the opposition last week and a third quit yesterday.
The U.S. is the world’s biggest oil consumer, using 19.1 million barrels a day in 2010, or 21 percent of global consumption, according to BP Plc’s Statistical Review. China is the second largest, accounting for about 11 percent and the European Union used 16 percent.