Oil Traded Higher Overnight on Greek Bailout Expectations and Dwindling Supply Stock

“Oil traded near the highest in three weeks on speculation shrinking U.S. crude supplies and Europe’s steps to stem its debt crisis will boost fuel demand.

Futures gained 2.1 percent yesterday and rose as much as 0.6 percent today as analysts surveyed by Bloomberg News predicted U.S. inventories dropped last week. EU leaders will decide on additional help for the Greek economy by the end of this month, according to Jean-Claude Juncker, head of the group of euro-area finance ministers. Prices may rise to $105 a barrel in “a few days”, MF Global Holdings Ltd. said today.

“From a pure fundamental point of view, the market is going to tighten and that means over the next few months rising prices are more likely,” said Andy Sommer, a senior analyst at EGL AG in Dietikon, Switzerland. He predicts Brent, now trading near $116 a barrel, will rise to $125 by the end of the year.

Crude for July delivery was at $102.56 a barrel, down 14 cents, in electronic trading on the New York Mercantile Exchange at 11:50 a.m. London time. Prices climbed $2.11 to $102.70 yesterday, the highest since May 10. Oil slipped 9.9 percent in May, the first decline in nine months.”

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