Brent crude trimmed gains and US crude hovered near flat on Tuesday as disappointing US data reined in prices that had surged on hopes that Greece can reach a debt deal and on a European Union move toward budget discipline. Iran completed a round of talks with UN nuclear inspectors, termed "constructive" in the semi-official Fars Iranian news agency, softening support from concern that US lawmakers preparing a vote on more sanctions might trigger a supply disruption.
Global equities, the euro and oil and copper all initially gained after Greek Prime Minister Lucas Papademos raised hopes of a deal this week to avoid a debt default and Luxembourg's Finance Minister Luc Frieden said Greece and private creditors were close to a debt deal.
US gasoline and heating oil futures, with February contracts set to expire on Tuesday, were supported by the threat of a US refinery workers' strike. Contract talks continued ahead of a midnight Wednesday deadline that could to shut 6 percent of US refining capacity.
Wall Street equities and oil prices were pressured by data showing US home prices fell more than expected in November, consumer confidence soured in January and slower growth in the Midwest in January. Brent March crude was up 53 cents at $111.28 a barrel at 1:28 pm EST (1828 GMT), having pulled back after jumping $3.15 to an intraday peak of $113.90.
Brokers said early volatility and part of the $3 jump resulted from computer-driven trading, with a surge in volume when the Brent market went through a key buying level, triggering a large buy order. Brent remained on pace to post a monthly gain of more than 3 percent, strongest percentage rise since front-month Brent rose 6.6 percent in October, according to Reuters data.
US March crude was up 1 cent at $98.79 a barrel, after jumping to $101.29 and needing to close above $98.83 in order to post a monthly gain. "We've heard this out of Greece and the euro zone before and after the weak US data it just wasn't enough to keep oil at the early highs," said Dan Flynn, analyst at PFGBest Research in Chicago.
Iran's dispute with the West over its nuclear program and whether or not Tehran is engaged in making atomic weapons continues to attract market players' focus. The completed talks with UN's International Atomic Energy Agency came after the IAEA inspectors started Saturday and an unnamed source quoted by the Fars news agency said the two sides agreed to continue talks. The US CIA director told a Senate committee on Tuesday that rival Opec-member Saudi Arabia's oil production appears to be ramping up and can fill some of the shortfall caused by sanctions on Iranian exports. Also, current sanctions appear to be biting much more in recent weeks.
The US Senate Banking Committee plans to vote on a new round of sanctions targeting Iran's energy sector. The package comes on the heels of new banking sanctions that the Obama administration is only beginning to implement as well as tough new embargos by European nations.
"Iran will make sure we see more upside than downside," said Jeremy Friesen, a commodity strategist at Societe Generale. US crude oil inventories were expected to have increased last week on recovering imports, a preliminary Reuters survey of analysts on Monday showed. Distillate stocks were expected to be lower, while gasoline inventories rose, the survey said.
Comments
Comments are closed.