Commodity Oil Advanced in New York as Greece Concern Debt

Commodity oil advanced for a second day in New York as concern eased that Greece will default on its debt and investors bet a report will show U.S. crude stockpiles dropped for a third week.

Futures climbed as much as 1.6 percent after Luxembourg?s Prime Minister Jean-Claude Juncker said his Greek counterpart assured him the government would do everything to ensure financial aid. Mirae Asset Securities Ltd. raised its Brent price forecasts by 15 percent as fighting in Libya continued to disrupt supplies. An Energy Department report tomorrow may show U.S. crude inventories fell for a third week, according to the median of 12 analyst estimates in a Bloomberg News survey.

?The markets right now are under the spell of supply insecurity on the one side, and sentiment and overall macroeconomic indicators on the other,? said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. ?The rebound we?re seeing today is moderate considering the recent slide.?

Oil for July delivery rose as much as $1.48 to $94.74 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.34 at 12:38 p.m. London time. The contract expires today. The more actively traded August future gained $1.25 to $94.88.

Crude in New York, up 21 percent in the past year, has dropped 17 percent from this year?s settlement high of $113.93, reached on April 29. A 20 percent decline is one measure used to define a ?bear market.?
Technical Indicators

Brent oil for August delivery was at $112.36 a barrel, up 67 cents, on the London-based ICE Futures Europe exchange. The contract yesterday fell $1.52, or 1.3 percent, to $111.69. Prices have advanced 42 percent the past year.

Oil yesterday fell below its lower Bollinger Band, a technical signal that prices may have declined too far. The contract also slid below its 200-day moving average of $92.30 a barrel, a level that can attract buyers, supporting prices.

?There?s a little bit of optimism leading back into the market and the chances are that the Greece concerns will probably be solved some way,? said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted prices will average $100 a barrel this year. ?We feel oil is due for a bit of a bounce.?
Greek Confidence Vote

Greece?s cabinet faces a confidence vote in parliament today. Prime Minister George Papandreou is seeking the ?widest possible? consensus for a medium-term budget plan, he told reporters yesterday after meeting European Commission President Jose Barroso in Brussels.

European Union leaders have insisted he gain multi-party support for austerity measures that are a condition for the aid needed to avoid default as soon as next month.

Mirae Asset Securities raised its average Brent crude forecasts for 2011, 2012 and 2013 by 15 percent to $115 a barrel on the ?sustained loss? of Libyan oil supplies, according to a report e-mailed today. Production in the North African country has been cut by almost 90 percent since fighting broke out between rebel forces and troops loyal to leader Muammar Qaddafi.

U.S. inventories dropped 1.63 million barrels, or 0.4 percent, to 363.9 million in the seven days ended June 17, according to the analysts surveyed before the Energy Department?s report tomorrow. Nine of the respondents forecast a decline, two projected a gain and one said there was no change. The industry-funded American Petroleum Institute will report its own data today.

The third weekly drop in U.S. crude supplies would be the longest stretch of declines this year, reflecting an increase in gasoline output to the highest level in nine months. Refineries probably operated at 86.6 percent of capacity last week, up 0.5 percentage point from the prior week, the survey showed.