Oil Rises to Three-Month High as Greece Backs Down on Rescue Package Vote

Oil traded near its highest in three months in New York as signs that Europe will reach an agreement with Greece on a rescue plan reduced concern economic growth will falter and damp fuel demand.

Futures added as much as 0.6 percent and are poised for a fifth weekly gain, the longest rising streak since April 2009. Greece won’t hold a public vote on a bailout package, Finance Minister Evangelos Venizelos told lawmakers in Athens yesterday. Oil is approaching its 200-day moving average, which is at $94.84 a barrel today, according to data compiled by Bloomberg.

“The euro zone is the risk factor for the oil price,” said Sintje Boie, an analyst at HSH Nordbank in Hamburg, who predicts the price of Brent crude will slide to $105 by year- end. “The uncertainty is high but we don’t expect it will end in a catastrophe. Oil demand is not so bad in the U.S., and growth in Asia is strong.”

Crude for December delivery was at $94.18, up 11 cents, in electronic trading on the New York Mercantile Exchange at 9:06 a.m. London time, after climbing as much as 58 cents to $94.65 a barrel. The contract rose to $94.65 on Oct. 25, the highest intraday price since Aug. 1. Futures are up 0.9 percent this week and 3.1 percent in 2011.

Brent oil for December settlement on the London-based ICE Futures Europe exchange was at $111.07 a barrel, up 24 cents. The premium of Brent to New York crude was at $16.89, down 4from a record high settlement of $27.88 on Oct. 14.

Europe Demand

The European Union accounted for 16 percent of world oil demand in 2010, according to BP Plc’s annual Statistical Review of World Energy. The U.S. is the world’s biggest oil consumer, using 19.1 million barrels a day, or 21 percent of global consumption.

“As we get some probability the Europe situation is being contained then people are willing to put risk back on,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “With the prospect of a low-growth economic environment and a still tight supply situation, that still puts a bit of a base under oil.”

Payrolls in the U.S. probably climbed by 95,000 workers last month after a 103,000 increase in September, according to the median forecast of 91 economists surveyed by Bloomberg News before a Labor Department report today. The jobless rate was 9.1 percent for a fourth month, economists predicted.

Better Than Recession

The gain is “not nearly enough jobs to reduce unemployment and feed through to an increase in confidence,” said Spooner at CMC Markets. “But it is better than the recession outlook that we were looking at before.”

Oil in New York may be poised to drop as the market’s five- day stochastic oscillators remain above 70, an indication prices may have advanced too quickly, according to Bloomberg data. Investors tend to sell contracts when they are considered “overbought.”

Crude may fall next week on forecasts of an economic slowdown in Europe that may crimp fuel demand, according to a Bloomberg News survey. Nineteen of 31 analysts and traders, or 61 percent, forecast futures will decline through Nov. 11. Ten, or 32 percent, predicted a gain, and two said there will be little change. Last week, 48 percent of those polled projected a price drop.

Bloomberg