Oil above $86 on oil spill concerns, Greece
London, May 3, 2010
Oil edged above $86 a barrel on Monday, gaining for a fourth session, balanced by concerns about the oil spill in the US and doubts about a massive bailout package for Greece.
Financial markets reacted sceptically to the record 110 billion euro ($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 1102 GMT. It has gained more than 60 percent 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 US 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 US 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.
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. – Reuters