How do Greece’s fiscal problems relate to the oil market?
*Bloomberg/BusinessWeek, by Mark Shenk, April 26, 2010
”Oil retreated as much as 0.7 percent as the euro dropped for the seventh time in eight days on concern the European Union-led Greek bailout plan will be held up. Brent oil in London climbed to an 18-month high earlier today as corporate earnings improved, signaling that fuel demand will increase.
‘The dollar seems to be the primary driver of the oil market right now,’ said Kyle Cooper, a managing director at energy consultant IAF Advisors in Houston. ‘We aren’t really focused on the fundamentals of the oil market.’
Crude oil for June delivery fell 54 cents, or 0.6 percent, to $84.58 a barrel at 9:59 a.m. on the New York Mercantile Exchange. Futures reached $85.63, the highest level since April 15. Oil is up 6.6 percent this year.
Brent crude for June settlement declined 11 cents to $87.14 a barrel on the London-based ICE Futures Europe exchange. The contract touched $87.75 a barrel, the highest intraday price since Oct. 7, 2008. Brent, usually cheaper than contracts on the Nymex, is trading at a $2.47-a-barrel premium.
The dollar advanced to $1.3319 against the euro, up 0.5 percent from $1.3384 on April 23. The euro fell against all 16 of its most-traded peers on concern the Greek bailout plan will face hurdles as donor countries begin ratifying the aid package.
German Chancellor Angela Merkel said Greece needs to show its budget is on a ‘sustainable’ path and a full German agreement to a bailout may take ‘a few days.’ She made the remarks in a statement in Berlin.”
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