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Oil prices rise on optimism about Greece

Oil prices near $92 a barrel after weekend opinion polls show Greece's austerity parties could form a coalition. In London, oil prices move up nearly $1 a barrel.

By Pablo GorondiAssociated Press / May 28, 2012

Traders work in the oil options pit at the New York Mercantile Exchange last Thursday. Oil neared $92 a barrel in foreign trading Monday as hopes rose that Greece could stay in the eurozone.

Richard Drew/AP/File

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Oil rose to near $92 a barrel Monday as Greek polls suggested pro-austerity parties might win elections next month, raising the likelihood the country will stay in the euro common currency.

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By early afternoon in Europe, benchmark oil for July delivery was up 97 cents to $91.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 20 cents to settle at $90.86 in New York on Friday.

In London, Brent crude for July delivery was up 96 cents at $107.79 per barrel on the ICE Futures exchange.

Opinion polls published Sunday indicated two parties that favor implementing Greece's bailout programs could be able to form a coalition government. Greek politicians were unable to form a government after an election earlier this month, requiring new elections in June.

Crude has dropped from $106 the first week of May amid fears a chaotic Greek exit from the euro would deepen economic malaise and weaken crude demand in Europe.

Easing tensions over Iran nuclear program amid talks between Iran and six world powers have also helped lower oil prices, but analysts warned that it was too early to dismiss the risk factors.

Iran and the international powers "remain as far apart as ever," according to energy consultants KBC in London. "So the situation remains clouded and the negotiators' position a tricky one. Inevitably the issue will run right down to the wire."

Some analysts expect oil will linger near present prices until after the Greek vote, OPEC's quarterly meeting and the next round of Iran nuclear discussions all take place in mid-June.

"Both European debt and Iranian nuclear issues are on something of a hold for another month," Barclays said in a report. "We would not expect the oil market to gain much of a sustained sense of direction" before those events.

Markets are in the U.S. are closed Monday for the Memorial Day holiday.

In other energy trading, heating oil was up 1.53 cents at $2.8482 per gallon and gasoline futures added 2.39 cents to $2.8556 per gallon. Natural gas fell 7.1 cents at $2.556 per 1,000 cubic feet.

Alex Kennedy in Singapore contributed to this report.

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