Forexpros – Crude oil futures rose for a second day on Wednesday, amid hopes that this week’s European Union summit would result in a breakthrough on the region’s debt crisis, while ongoing concerns over a disruption to supplies from Iran lent further support.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD101.81 a barrel during European morning trade, climbing 0.52%.
It earlier rose by as much as 0.65% to trade at a two-day high of USD101.94 a barrel.
European leaders were to discuss proposed changes to EU treaties which would allow for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc.
Separately, the Financial Times reported late Tuesday that European officials were in talks to potentially double the firepower of the region’s bailout fund.
Focus on the summit has intensified since Standard & Poor’s placed 15 euro zone nations, including Germany and France, on review for credit downgrades on Monday due to the region’s deepening financial crisis.
Euro zone developments have dominated trading in the oil market for the last several months, amid worries that the sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.
The euro zone accounted for nearly 16% of global oil consumption in 2010, according to data from British Petroleum.
Crude prices continued to draw support from the prospect of additional sanctions on Iran’s energy industry. The EU’s energy commissioner, Gunther Oettinger, said Tuesday that the bloc believes a ban on Iranian oil imports should be pursued.
Iran is the world’s fourth largest oil producer, pumping nearly 5% of the world’s oil in 2011 and the second biggest exporter among the Organization of the Petroleum Exporting Countries.
Meanwhile, oil traders were awaiting key weekly government data on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The report was expected to show that U.S. crude oil stockpiles fell by 1.1 million barrels last week, while gasoline supplies were forecast to increase by 1.0 million barrels.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories fell by 5.0 million barrels last week, while total gasoline supplies rose by 6.0 million barrels.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery added 0.25% to trade at USD111.09 a barrel, with the spread between the Brent and crude contracts standing at USD9.28 a barrel.
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