Oil higer as Greece avoids default

Agence France-Presse

Posted at Jul 04 2011 10:52 AM | Updated as of Jul 04 2011 06:52 PM

SINGAPORE - Oil was higher in Asian trade Monday after eurozone finance ministers cleared the way for debt-hit Greece to receive 12 billion euros by mid-July, analysts said.

In morning trade, New York's main contract, West Texas Intermediate for August delivery, rose 20 cents to $95.14 a barrel and Brent North Sea crude for August added 19 cents to $111.96.

A key factor supporting oil prices is the "confirmation that Greece will get the batch of bailout money from the eurozone," said Victor Shum, a Singapore-based analyst with Purvin and Gertz energy consultancy.

"That has eased concerns about Greece sinking the European region into a downturn," he told AFP.

Eurozone finance ministers Saturday cleared the way for Athens to receive the next 12-billion-euro tranche of last year's 110-billion-euro ($160 billion) European Union-International Monetary Fund bailout.

But the ministers still need to work on a second rescue package potentially of similar size to ensure Greece can stay afloat until at least 2014, warding off a devastating default that would reverberate across Europe.

European diplomats warn that eurozone finance chiefs are unlikely to finalize a second bailout at their next meeting on July 11 and that Greece may have to wait until September.

Negotiations for a new rescue are more complex because some governments, especially Germany, want private investors to share the burden by agreeing to voluntarily "roll over" their Greek debt.