Forexpros – Crude oil futures were steady to higher in Asian trading on Wednesday, firmer after a bouncy selloff stemming from fresh fears that default looms for Greece and on relief that talks may resume between Iran and the West to ease tensions in the Middle East.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at USD105.08 a barrel, up 0.36%.
The commodity hit an earlier session high of USD105.09 and a low of USD104.70.
In Greece, fears of a default took center stage when news broke that that too few private creditors have confirmed to go through a debt restructuring by a March 8 deadline.
Greece and private creditors have agreed on a restructuring deal, under which private investors forgive Greece 53.5% of their principal and swap their remaining holdings for new Greek bonds and notes from the European Financial Stability Facility.
Greece has said the deal goes through if 75% of eligible private creditors sign on by a March 8 cut-off date, although reports hit the wire earlier that about 20% are accounted for so far and with only days to go before deadline.
Restructuring the country’s debts with private creditors is a requirement for Greece to tap a EUR130 billion rescue fund, and failure to push the restructuring through could lead to a messy default.
A messy default could cool economies in Europe and across the globe, which would crimp demand for oil and derivatives.
Oil prices have surged in recent weeks on fears that tensions between the west and Iran could escalate in widespread supply cuts or even military strikes.
The West accuses of Iran of developing nuclear weapons and has slapped sanctions on the country, while Iran says its nuclear technology is for peaceful energy uses.
Reports emerged that European Union officials and Iran have expressed a willingness to return to the negotiating table.
China’s recent decision to set a 7.5% gross domestic growth target for this year has also pushed oil prices down, as the figure is lower than past forecasts and reflects sentiment that the Asian giant may need less crude to run its economy.
By Asian trading on Wednesday, bottom fishers had decided crude had fallen enough.
On the ICE Futures Exchange, Brent oil futures for April delivery were up 0.14% and trading at USD122.38 a barrel, up USD17.30 from its U.S. counterpart.
The gap in price between the two contracts is pushing toward the higher end of a range between a nearly USD20.00 all-time high and a historical spread of USD1.00.
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