Oil futures rally after euro zone approves Greek bailout extension
Crude oil futures shook off earlier weakness to hit the highest levels of the session on Tuesday, after euro zone finance
ministers agreed on a deal to extend Greece’s bailout by four months. The Euro group approved Greece's list of reform
proposals earlier in the day, paving the way for a four-month extension of the country's bailout program. On the ICE Futures
Exchange in London, Brent oil for April delivery hit an intraday low of $58.13 a barrel, before recovering to trade at $60.09
during U.S. morning hours, up $1.19, or 2.01%. A day earlier, the April Brent contract sank $1.32, or 2.19%, to settle at
$58.90 a barrel. Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in April rose 66 cents, or 1.33%, to
trade at $50.11 a barrel after hitting a session low $48.72. A day earlier, Nymex oil tumbled $1.36, or 2.68%, to end at $49.45
as lingering concerns over a supply glut in the U.S. drove down prices. Industry research group Baker Hughes (NYSE:BHI)
said Friday that the number of rigs drilling for oil in the U.S. fell by just 37 last week, the smallest weekly drop this year and
compared to a decline of 84 rigs in the preceding week. The number of rigs drilling for oil in the U.S. totaled 1,019, the
lowest since August 2011. The number of oil rigs has declined in 16 of the last 19 weeks since hitting an all-time high of
1,609 in mid-October. However, oil supplies in the U.S. stand at the highest level in at least 80 years, indicating that cheap prices have yet to affect output. Market participants looked ahead to fresh weekly
information on U.S. stockpiles of crude and refined products to gauge the strength of demand in the world’s largest oil
consumer. The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s
government report could show crude stockpiles rose by 4.0 million barrels in the week ended February 20. Meanwhile, the
spread between the Brent and the WTI crude contracts stood at $9.98 a barrel, compared to $9.45 by close of trade on
Monday. Oil prices have fallen sharply in recent months as OPEC resisted calls to cut output, while the U.S. pumped at the
fastest pace in more than three decades, creating a glut in global supplies.
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