Singapore: Oil was steady on Tuesday, trading near $74 in New York, as concerns over Greece’s sovereign debt kept the euro close to nine-month lows against the dollar.
At a meeting in Brussels on Monday, euro zone finance ministers urged Greece to announce more deficit-control steps by mid-March if needed, without saying anything new of last week’s pledge to bail out the southern European economy.
“There is definitely concern mounting about the sustainability of the recovery in Europe,” said Ben Westmore, a commodities analyst at the National Australia Bank. “There is a lot of sitting and waiting; at $74 oil seems to be reasonably priced based on fundamentals at the moment.”
US crude for March delivery gained 7 cents to $74.20 a barrel at 0230 GMT, having traded close to $74 throughout Monday’s session, which NYMEX will combine with Tuesday’s because of the Presidents’ Day holiday.
Activity was subdued during Asian trading hours as markets in China, Hong Kong, Singapore, Taiwan and Vietnam remained shut for the Lunar New Year holiday. London ICE Brent for April climbed 34 cents to $72.85 a barrel.
Greece’s debt woes and a weak euro were likely to keep some investors in the region away from oil as they try to offload commodity-related risk from their portfolios, according to Westmore.
“When there are so many concerns about depreciation, given that oil is denominated in dollars, it becomes more expensive to buy from the perspective of European investors,” Westmore said.
Oil has traded in a relatively tight $15 range between $69 and $84 a barrel since the beginning of October. Prices crashed to less than $33 at the end of 2008 from a record in July of that year above $147. Expectations of an economic recovery have supported prices since then near OPEC’s comfort zone.
“We would expect oil prices for the remainder of the year in the current range, perhaps with a slight upwards drift but no dramatic spikes,” BP chief economist Christof Ruehl said on Monday in an interview with Reuters Insider television on the sidelines of an industry conference in London.
US oil inventory reports will be published a day later than usual this week because of Monday’s holiday. The American Petroleum Institute will release statistics collated from industry on Wednesday, followed by government data from the Energy Information Administration on Thursday.