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05 March 2024

Oil crosses $75 as euro edges up

Geopolitical rumblings, especially Nigeria, in the background are helping prices. (REUTERS)

By Reuters

Oil skipped over $75 per barrel, up more than $1, yesterday responding to a euro struggling higher against the dollar and supported by tensions over pressure for more sanctions against Iran.

US crude for March delivery touched a session high of $75.23 per barrel, up $1.10, before easing back to be up 80 cents at $74.93.

The benchmark Brent contract for April delivery was trading up 96 cents per barrel at $73.47 after having touched an intra-day peak of $73.74 earlier.

Trading volumes continued light with much of Asia shut for the Lunar New Year holiday and US markets opening later after Monday's closure for Presidents' Day.

"Macro pessimism is definitely fading away as long as a resolution (to Greece's problems) is not far away," said Amrita Sen, energy analyst at Barclays Capital.

"Geopolitical rumblings, especially Nigeria, in the background are definitely helping prices," said Sen.

US Secretary of State Hilary Clinton said Iran's Revolutionary Guards are driving the world's fourth-largest oil producer towards military dictatorship and should be targeted in any new UN sanctions. "In Nigeria, Acting President Goodluck Jonathan is looking for swift progress reviving an amnesty programme in the oil-producing Niger Delta where years of attacks by militants have disrupted supplies.

On the foreign exchange markets, the euro rose against the dollar as European finance ministers put more pressure on Greece to resolve its fiscal problems.

But many investors remain cautious about buying the single currency on uncertainty that debt problems in Greece will be resolved quickly. That kept the euro's gains fragile ahead of a meeting in Brussels yesterday and the single currency was trading at $1.3663, off a high of $1.3682. Euro zone states have urged Greece to announce more deficit-control steps by mid-March if needed as the country tries to grapple with its huge debt.

Oil, which went from a record in July 2008 above $147 to less than $33 at the end of that year, has traded in a relatively tight $15 range between $69 and $84 a barrel since the beginning of October as expectations of an recovery support prices near Opec's comfort zone. US oil inventory reports will be published a day later than usual this week because of Monday's holiday.


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