Oil edges above $86 on oil spill concerns, Greece
Oil edged above $86 a barrel today balanced by concerns about the oil spill in the United States and doubts about the massive bailout package for Greece.business Updated: May 03, 2010 16:12 IST
Oil edged above $86 a barrel on Monday balanced by concerns about the oil spill in the United States and doubts about the massive bailout package for Greece.
The euro and European shares fell on concerns that the 110-billion-euro bailout of Greece may still face political hurdles.
The worries also wound back investors' risk appetite and helped lift the US dollar.
US crude for June delivery rose 8 cents to $86.23 a barrel by 1011 GMT, off an earlier intra-day high of $86.79. Brent crude added 24 cents to $87.68.
The Greece bailout "should support commodity prices as it supports risk appetitie, but the market reaction was rather lukewarm," said Carsten Fritsch, analyst at Commerzbank.
"One factor supporting oil prices is the oil spill in the US and concerns about oil supply in the US," he said.
A vast oil slick bore down on the US Gulf Coast on Sunday, as efforts to check the oil flow and disperse and contain the spreading slick were being hampered by high winds and rough seas.
The market remains supported by speculation that the spill would help draw down US crude inventories, said Ben Westmore, a resource analyst at National Australia Bank.
The US government on Saturday said two offshore production platforms in the Gulf of Mexico were shut as a safety precaution -- the first sign that the oil slick was affecting the region's energy production.
But analysts said the location of the spill was well east and north of the heart of the region's oil and gas production.
In addition, investors were wary about outlook after China on Sunday raised the amount that lenders must keep in reserve at the central bank to temper inflationary pressures, its third such move this year.
Oil in New York rose for a third straight month in May and has gained more than 60 per cent in the past year, supported in part by expectations of stronger economic growth that will lead to higher fuel demand.