Gasoline rose as oil climbed to the highest price in nine months after euro-area finance ministers agreed on a second bailout for Greece.
The best-performing energy commodity this year advanced to a seven-month high as crude gained as much as 2.7 percent. European finance ministers approved 130 billion euros ($173 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing more debt relief to shield the region from a default.
“It’s very much the Greek situation and the stability it brings to the markets,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “Now we can focus on the continuing improving data set that we’ve been getting in the U.S.”
March-delivery gasoline rose 5.46 cents, or 1.8 percent, to settle at $3.0702 a gallon on the New York Mercantile Exchange, the highest price since July 29. Prices are up 14 percent so far this year.
Greece’s debt may still balloon to 160 percent of gross domestic product in a worst-case scenario, analysis by the International Monetary Fund and European officials indicated.
Prices also gained as an Iranian military commander said Iran would consider taking pre-emptive action in response to threats, according to the state-run Fars news agency.
“We will no more wait to see enemy action against us,” Fars quoted Mohammad Hejazi, deputy head of the General Staff of the Iranian Armed Forces for Logistic and Industrial Research, as saying in an interview.
Iran suspended oil deliveries to France and the United Kingdom, increasing concern that oil supplies may tighten. Iran won’t cede its “right” to peaceful atomic energy and has mastered the full nuclear-fuel cycle, Foreign Ministry spokesman Ramin Mehmanparast said today.
A team of officials from the International Atomic Energy Agency, the United Nations’ nuclear watchdog, arrived in Tehran yesterday for two days of meetings that provide an opportunity to defuse allegations of a military aspect to the country’s nuclear program.
Iran’s suspension of exports to France and the U.K. followed a warning by its oil minister that Tehran might preempt a European Union ban on purchases of the nation’s crude planned to start July 1, the oil ministry’s news website, Shana, said yesterday, citing Alireza Nikzad Rahbar, a spokesman.
The EU and U.S. imposed sanctions on Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries, in an attempt to halt its nuclear program.
“With Iran cutting off sales to England and France, although these are small amounts of oil, the market is concerned that could spread to other countries in Europe, resulting in refiners looking for alternative sources of supply,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said by phone. “It puts pressure on crude oil prices around the world, which translates to higher gasoline prices as the U.S. is a substantial importer of gasoline from Europe.”
EU nations bought a combined 18 percent of Iran’s crude and condensate exports, or 452,000 barrels a day, in the first half of 2011, according to the most recent data on the website of the U.S. Energy Information Administration. France purchased 2 percent of Iran’s shipments, or 49,000 barrels a day, while the U.K. took less than 1 percent, the data showed.
Regular gasoline at the pump, averaged nationwide, rose 0.5 cent to $3.57 yesterday, according to AAA data. Prices are the highest ever for this time of year.
Heating oil for March delivery climbed 5.04 cents, or 1.6 percent, to $3.2393 a gallon on the exchange.