Oil Rises From One-Week Low as Euro Ministers Agree on Greek Aid

November 27, 2012

Bloomberg reports that global oil prices rose yesterday from the lowest level in almost a week after European finance ministers reached an agreement on aid for Greece, easing concern that Europe’s debt crisis will derail the economic recovery and curb fuel demand.

Crude for January delivery gained as much as 35 cents to $88.09 a barrel in electronic trading on the New York Mercantile Exchange and was at $88.03 at 12:37 p.m. Singapore time. The contract decreased 54 cents yesterday to $87.74, the lowest since Nov. 21. Prices are down 11 percent this year.

Brent for January settlement advanced 17 cents to $111.09 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $23.09 to West Texas Intermediate, compared with $23.18 yesterday.

International Monetary Fund Managing Director Christine Lagarde told reporters after the Brussels meeting that her aim to get Greece’s debt on a “sustainable path” was achieved in today’s discussions, according to Bloomberg.

The European Union accounted for 16 percent of the world’s oil consumption last year, according to BP's Statistical Review of World Energy 2012. The U.S. and China were the world’s biggest crude users, accounting for a combined 32 percent of global oil consumption.

Bloomberg reports that New York oil futures will average $95 a barrel next year as U.S. President Barack Obama approves the Keystone XL pipeline to import Canadian supply, Mirae Asset Securities said today. And Brent will average $115, up from $111 this year, as global demand rises 0.9 percent annually to more than 90.5 million barrels a day, Gordon Kwan, the Seoul-based broker’s head of energy research in Hong Kong, said in an e-mailed report. He forecasts China and the Middle East driving almost two-thirds of rising demand.

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