Crude oil climbed to a six-week high on optimism that the U.S. will increase its debt ceiling and as euro-region leaders worked to convince investors that plans to contain the debt crisis will be adequate.
Oil increased for a fourth week as President Barack Obama and House Speaker John Boehner, seeking to avert a U.S. default, are pursuing a broad agreement to boost the debt limit. German Chancellor Angela Merkel said government chiefs had widened the scope of their bailout fund to allow it to buy the bonds of debt-laden nations.
“The Europeans came to a deal to bail out Greece,"" said Kyle Cooper, director of research for IAF Advisors in Houston. ""At the same time they are moving toward a consensus to raise the debt ceiling here in the U.S. Those are being used as somewhat positive news for oil.”
Crude for September delivery rose 74 cents, or 0.8 percent, to $99.87 a barrel on the New York Mercantile Exchange, the highest settlement since June 9. Prices, which have gained 9.3 percent this year, rose 2.7 percent this week.
Brent for September settlement rose $1.16 to settle at $118.67 a barrel on the London-based ICE Futures Europe exchange.
The euro fell 0.4 percent to $1.4365 in New York, its first decline in four days. The Standard & Poor’s index gained 0.1 percent to 1,345.03.
Oil also gained after a bomb blast in central Oslo shattered windows at the prime minister’s office and nearby buildings. At least seven people were killed and several others injured, according to the Associated Press.
“The attack in Oslo is supportive because of the uncertainty it created,” said Phil Flynn, an analyst with PFGBest in Chicago. “More than anything, the U.S. debt showdown is really dominating everything.”
Obama and Boehner, each facing strife within his own ranks and dwindling time to avert a U.S. default, pressed for a broad agreement to boost the debt limit while cutting spending by trillions of dollars and overhauling the tax code. Negotiators aren’t close to an agreement, the speaker told reporters after meeting with rank-and-file House Republicans.
Euro-area leaders announced 159 billion euros ($229 billion) in new aid for Greece. Merkel said government chiefs had learned from “systemic effects” in the single- currency area and widened the scope of their bailout fund to allow it to buy the bonds of debt-laden nations, support banks and offer credit lines.
‘Back from brink’
European leaders brought the region “back from the brink” as they agreed to support the new bailout package for Greece and to give new powers to the euro area’s rescue fund, said Fitch Ratings’ David Riley.
“The market has been boosted by Greek bailout euphoria, but even that was insufficient to move Brent above $120,” said Christopher Bellew, senior broker at Jefferies Bache Ltd. in London.
U.S. fuel demand rose in June as consumption of diesel by truckers reached a record high, according to the American Petroleum Institute.
Total deliveries of petroleum products, a measure of demand, climbed 2.9 percent to 22.2 million barrels a day last month from a year earlier, the industry-funded group said on Saturday in a report. Gasoline usage was almost unchanged from the year before, with all of the increase coming from other fuels.
U.S. crude stockpiles fell 3.73 million barrels to 351.7 million in the week ended July 15, according to the Energy Department.
No new release
The U.S. and 27 allies said on Friday that they don’t plan to extend the release of emergency oil stockpiles announced through the International Energy Agency last month.
The Paris-based agency said that while it’s prepared to “augment” the sale of 60 million barrels first announced on June 23, this intervention combined with higher output from the Organization of Petroleum Exporting Countries will for now “substantially cover” the loss of exports caused by an armed conflict in Libya.
The Libyan revolt, which began in February, has reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell 50,000 barrels, or 25 percent, to 150,000 barrels a day last month, a Bloomberg News survey showed, the lowest amount in yearly data since 1962. It pumped 1.59 million barrels in January, before the uprising.
The IEA’s action was the third time the agency has coordinated the use of emergency stockpiles since it was founded in 1974. The first was during the 1991 Persian Gulf War and the second in 2005 when Hurricane Katrina struck the Gulf of Mexico.
Oil volume in electronic trading on the Nymex was 422,173 contracts as of 4:01 p.m. in New York. Volume totaled 549,531 contracts on Friday, 19 percent below the average of the past three months. Open interest was 1.49 million contracts.