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Oil edges above $86 on oil spill concerns, Greece

Oil edges above $86 on oil spill concerns, Greece
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First Published: Mon, May 03 2010. 04 17 PM IST
Updated: Mon, May 03 2010. 04 17 PM IST
London: Oil edged above $86 a barrel on Monday, gaining for a fourth session, balanced by concerns about the oil spill in the United States and doubts about a massive bailout package for Greece.
Financial markets reacted sceptically to the record €110 billion ($146 billion) bailout, with investors doubting it will solve the euro zone’s debt crisis. European stocks fell and the dollar rose.
US crude rose 22 cents to $86.37 a barrel by 4:32pm. It has gained more than 60% in the past year. Brent crude added 39 cents to $87.83.
The Greece bailout “should support commodity prices as it supports risk appetite, but the market reaction was rather lukewarm,” said Carsten Fritsch, analyst at Commerzbank.
“One factor supporting oil prices is the oil spill in the U.S. 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 U.S. crude inventories, said Ben Westmore, a resource analyst at National Australia Bank.
On Saturday, the US government 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. For more stories on the spill, click on
In addition, investors were wary about the 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.
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First Published: Mon, May 03 2010. 04 17 PM IST
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