Oil Rises Most in a Week in New York on Greek Election Optimism

By Ben Sharples - Jun 18, 2012 6:31 AM GMT+0700

Oil rose to the highest in a week as projections showed Greece’s two largest pro-bailout parties winning enough seats to forge a parliamentary majority, easing concern Europe’s debt crisis will worsen and crimp fuel demand.

Futures gained as much as 1.9 percent in New York. The New Democracy and socialist Pasok parties won a combined 163 seats in the 300-member legislature, according to estimates from the Interior Ministry based on partially counted returns from voting yesterday. The prospect that anti-bailout party Syriza would gain control had rattled markets concerned Greece may quit the 17-nation Euro currency union.

Oil for July delivery advanced as much as $1.57 to $85.60 a barrel in electronic trading on the New York Mercantile Exchange, the highest intra-day price since June 11. It was at $84.73 at 9:36 a.m. Sydney time. The contract increased 12 cents to $84.03 on June 15, the highest close since June 8. Prices are down 14 percent this year.

Brent oil for August settlement rose 89 cents, or 0.9 percent, to $98.50 a barrel on the London-based ICE Futures Europe exchange. The front-month price for the European benchmark contract was at a premium to West Texas Intermediate of $13.53, up from $13.28 on June 15.

Syriza received 26.6 percent and 71 seats, the results showed. The vote forced Greeks, in a fifth year of recession, to choose open-ended austerity to stay in the euro or reject the terms of a bailout and risk the turmoil of exiting the 17-nation currency.

Crown Prince

The death of Crown Prince Nayef bin Abdulaziz Al Saud in Saudi Arabia, the world’s largest oil exporter, raised the issue of succession for the second time in less than a year.

Nayef, who also served as the kingdom’s interior minister for more than three decades, was interred yesterday in Mecca in an unmarked grave. King Abdullah, who is in his late 80s, attended the ceremony.

Nayef’s death leaves Prince Salman bin Abdulaziz as a leading contender for the crown prince position, as the kingdom grapples with high youth unemployment, security issues including the threat of al-Qaeda militants and unprecedented political change in the Middle East.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net