February 8, 2012 / 3:26 AM / 8 years ago

Brent ends at 6-month high on Greek hopes

NEW YORK (Reuters) - Brent crude oil futures rose for the seventh straight day on Wednesday, closing at the highest in more than six months on hopes that a deal to bail out debt-strapped Greece was near.

A driver refuels his car at a gas station in Milan November 8, 2011. REUTERS/Alessandro Garofalo

Geopolitical risks, as violence escalated in Syria, and a new threat against the United States was voiced by Tehran’s ambassador to Moscow also provided support to Brent’s upside move.

News of an explosion that rocked a military barracks in Nigeria’s northern city if Kaduna, the latest in a string of blasts in Africa’s biggest oil supporter, added support.

In London, ICE March Brent crude settled at $117.20 a barrel, rising 97 cents, after further extending the day’s high to $177.50 in late trade, matching Tuesday’s high. It was the highest settlement for front-month Brent since July 28, when prices ended at $117.36.

U.S. March crude settled at $98.71, edging up 30 cents, after hitting a session high of $100.09 early. It rose for the second day in a row.

Brent’s premium against U.S. crude widened to $18.49 at the close, from $17.82 on Tuesday. The WTI-Brent spread widened to an intraday high of $20.71, on Tuesday, the widest since October.

Brent’s trading volume was up 31 percent from its 30-day average while U.S. crude volume rose 39 percent from the 30-day average, Reuters data showed.

“There was the optimism earlier about a deal on Greek debt that had crude up before the EIA (U.S. Energy Information Administration) data and more spread trading pushing it back up (the spread) to (near) $19,” said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut.

U.S. government data showed that domestic crude stockpiles rose 304,000 barrels last week, much less than analysts had expected, which countered a surprise 4.5-million-barrel drawdown reported the previous day by industry group American Petroleum Institute.

U.S. gasoline stocks rose more than forecast while distillates, which include heating oil and diesel fuel, unexpectedly increased, defying forecasts for a stock draw, the EIA data further showed.

“The (EIA) report is bearish, despite the small crude oil stock build,” said John Kilduff, partner at Again Capital LLC in New York.

“The demand numbers for distillates and gasoline continue to be poor, and the rise in inventories in those categories fosters a bearish outlook,” Kilduff added.

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GREECE DEAL AWAITED

In Athens, Greek political parties will try yet again to come to terms on an austerity measures in return for a new international rescue deal to avoid a chaotic debt default.

On both sides of the Atlantic, oil prices had risen in early trade on optimism about Greece, as negotiations to stave off a bankruptcy advanced after several delays.

Strong economic data from China and the United States has provided the backdrop to an 8.5 percent rise in Brent crude futures since the start of the year, but some market participants thought the rally was running out of steam.

DEMAND DATA IN FOCUS

Investors await forecasts for global oil demand from the Organization of Petroleum Exporting Countries due on Thursday and from the Paris-based International Energy Agency on Friday.

Earlier this week, the U.S. EIA raised its 2012 and 2013 forecast for global oil demand growth and said supply would tighten as gains in non-OPEC output lag, adding support to oil futures.

Additional reporting by Robert Gibbons in New York; Simon Falush and Zaida Espana in London; Editing by David Gregorio, Marguerita Choy and Bob Burgdorfer

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