Amidst Greece outlook and Iran tensions, Oil climbs for third day

by Fiona Gabriel | Sunday, May 27, 2012 | 566 views

The prices for oil rose for a third consecutive day as voters in Greece gave signs that they will be backing the austerity measure which could be the only possible way of bailing Europe out of its trouble and there has been a slight boost in confidence that the debt crisis in the bloc can be contained.

With the bailout plan , placed first in six opinion polls, being agreed upon by international lenders and Greece’s New democracy party; futures rose by as much as 1.2 %. Given the concerns surrounding a turmoil in Europe curbing the demand of fuel , the prices of  fuel have gone down by as much as 12 % this year. After UN announced on May 25 that Iran had boosted the enriched uranium output , the prices had climbed. As a result of the nuclear program, the nation will see an oil embargo.

The economy is finally looking slightly better , however the geopolitical situations continues to worsen. Also there have been predictions that B rent will see the prices of $105-$110 per barrel in the coming month. A conservative pro-euro government is likely in Greece and Syria situation seems to be deteriorating. Meanwhile, talks with Iran do not show any signs of sanctions being relaxed. On the New York Merchantile Exchange , crude for July rose by $1.13 reaching to 491.99 in electronic trading and was close to $91.85 near  the close of markets. On May 25 , the contract saw the rise of 0.2 % which was the highest close since May 22. Prices are already seeing a downfall of 7 % this year. No floor trading will be there on Monday given the Memorial day holiday.

For settlement in July the Brent oil was up by 94 cents at $107.77 on the ICS Futures Europe Exchange based in London. Prices are seeing a low of 10 % this month. The benchmark premium for contracts was unchanged at $15.92 per barrel to West Texas Intermediate.

There are Western sanctions on Iran for persuasion to stop the enriching uranium process which will see an oil embargo from July 1 for the second largest producer of crude in Organization of Petroleum Exporting Countries.

In its report on May 25, The International Atomic Energy Agency of the UN said that Iran had enriched its uranium reserves by 20 % since February. At the Fordo facility of the Persian Gulf nation there were 27 % enriched uranium particles that were found by the inspectors. Iran has been defending its uranium program as peaceful , it has been under IAEA scrutiny for almost a decade accusing it of developing nuclear weapons. On June 18 and 19 , negotiators from U.S , France , Germany , Russia , China and UK will be meeting their Iranian counterparts in Moscow.

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