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Oil Rises From Two-Day Low as Optimism on Greek Aid Counters U.S. Demand
By Ben Sharples – Feb 15, 2012 10:25 AM GMT+0700

Oil rose as European leaders pushed Greece for stronger commitments to an austerity package in return for a second bailout, easing concern that the region’s debt crisis will worsen and curb commodity demand.

Futures advanced from a two-day low, increasing as much as 0.6 percent. Greece’s two biggest political parties will provide written pledges on austerity measures today after European finance ministers canceled a meeting to agree on aid, the government in Athens said. Prices fluctuated earlier after reports showed rising crude stockpiles and falling gasoline demand in the U.S., the world’s biggest oil user.

“The commodity remains relatively well bid as if the market is optimistic that something will occur in Europe,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney, who forecasts New York crude may trade in a range between $102.50 and $96 a barrel. “Demand out of the U.S. continues to erode.”

Oil for March delivery rose as much as 63 cents to $101.37 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.27 at 2:21 p.m. Sydney time. It fell 17 cents to $100.74 yesterday, the lowest close since Feb. 10. Prices are 20 percent higher the past year.

Brent oil for April settlement gained 57 cents to $117.92 a barrel on the ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate for the same month was at $16.34, compared with $17.42 yesterday.
European Economy

European Union finance ministers canceled a meeting in Brussels and will instead hold a teleconference today to prod Greece to do more to clinch an aid package worth 130 billion euros ($171 billion) and about 100 billion euros of debt relief from private bondholders. The New Democracy and Pasok parties will provide the written commitments to austerity pledges, a government official in Athens said.

European leaders are torn between pouring more aid into Greece or risking a national bankruptcy that might force the country out of the euro and prompt renewed market turmoil.

U.S. crude stockpiles climbed 2.9 million barrels last week, the American Petroleum Institute said. An Energy Department report today is forecast to show a gain of 1.5 million barrels, according to a Bloomberg News survey of analysts.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Gasoline Demand

Motor fuel demand slid to the lowest level since MasterCard Inc.’s SpendingPulse report started in July 2004. U.S. drivers bought 8.01 million barrels of gasoline a day in the seven days ended Feb. 10, down 3.1 percent from a week earlier, the report showed. Gasoline use over the previous four weeks was 5.3 percent below the 2011 period, the 47th consecutive decline in that measure.

The U.S. accounts for about 21 percent of the world’s oil use and the EU consumes about 16 percent of the world’s oil demand, according to BP Plc’s Statistical Review of World Energy.

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