Fin24

Oil slippery on Greece debt hopes

2011-06-29 10:32

Singapore - Oil was mixed in afternoon Asian trade on Wednesday amid hopes Greece would avert a default on its massive debt and data showing stronger US energy demand.

New York's main contract, West Texas Intermediate for delivery in August, was down six cents at $92.83 a barrel after rising $2.28 on Tuesday.

Brent North Sea crude also for August climbed one cent to $108.79 after leaping $2.79 the day before.

Despite a general strike and street protests, traders were hopeful that the Greek parliament would on Wednesday pass the tough measures required under an International Monetary Fund-European Union bailout.

"The market is cautiously optimistic that the Greek parliament will approve... (an) austerity package to secure the next tranche of EU-IMF aid to avoid a default on its debt," DBS Bank said in a market commentary.

As police battled with anti-cuts protesters in Athens, EU president Herman Van Rompuy urged the parliament - where Prime Minister George Papandreou has a five-seat majority - to take a decision "crucial for the Greek people, but also for the eurozone and the stability of the world economy."

Other EU officials sent out similar messages, while newly appointed IMF chief Christine Lagarde called on the Greek opposition "to join in national unity."

"The country's destiny is at stake," Lagarde said in a French television interview. "I think that at this moment they need to put aside their major political differences."

Phillip Futures said in Singapore that data released by the American Petroleum Institute (API) showing a drop in US energy stocks is also supportive of prices.

Crude oil stocks fell 2.7 million barrels in the week to June 24, bigger than analysts' forecast for a drawdown of 1.4 million barrels.

A thinning of crude stocks indicates stronger demand in the United States, the world's biggest economy and its largest oil-consuming nation.