By Christian Schmollinger and Ben Sharples
(Bloomberg) – Crude oil was little changed above $77 a barrel in New York after rising as the dollar fell against the euro on speculation Greece won’t need a European Union bailout to meet deficit-reduction targets.
Oil climbed the most in more than four months yesterday as the euro rebounded from the lowest level against the dollar in nine months. A weaker U.S. currency bolsters the appeal of commodities as an alternative investment. Traders are looking to U.S. economic data releases today and tomorrow to confirm that the global economic rebound is continuing.
“Prices have just moved up on the euro,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. “If we continue to see strength, crude oil could be pulled up to $78.50. There are a lot of economic indexes to be published but those may still be fifty-fifty. They can’t all be positive.”
Crude oil for March delivery traded at $77.35 a barrel, up 34 cents, in electronic trading on the New York Mercantile Exchange at 1:54 p.m. Singapore time. Yesterday, the contract rose $2.88, or 3.9 percent, to $77.01, the biggest percentage gain since Sept. 30.
There was no floor trading in New York on Feb. 15 because of the Presidents Day holiday. Electronic trades that day and yesterday’s session counted toward the settlement.

Dollar Plunge

“The expectations that the economy is pulling out of recession is fueling investment demand,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “There is also a weaker dollar and geopolitical concerns with Iran,” he said.
The dollar traded at $1.3773 per euro at 1:58 p.m. in Singapore. It fell 1.26 percent yesterday, the most on a closing basis since it dropped 1.28 percent against the euro on July 31. Europe’s currency has fallen 9 percent against the dollar from a high of $1.5144 in November on concern that sovereign debt problems will hamper a recovery in the euro region.
The Federal Open Market Committee will release the minutes of their last meeting tomorrow. Traders will be looking for an indication that the group may unwind economic stimulus measures such as buying mortgage-backed securities or when they may decide an end period for keeping interest rates near zero.

U.S. Stockpiles

“Everyone is looking for a comment on an exit strategy,” said Newedge’s Hasegawa. “That could be a factor for buying U.S. dollars and that would be slightly bearish for the crude oil market.”
U.S. government data on the number of new houses under construction and the amount of industrial capacity being used will come out today at 9:15 a.m. Washington time. Expectations are for increases. The country is the world’s biggest oil consumer, contributing to 22 percent of global demand.
Stockpiles climbed 1.6 million barrels in the week ended Feb. 12 from 331.4 million the prior week, according to the median estimate before an Energy Department report this week.
Stockpiles of distillate fuel, a category that includes heating oil and diesel, probably fell 1.5 million barrels from 156.2 million the prior week, according to the survey. Gasoline supplies probably climbed 1.5 million barrels from 230.4 million, the survey showed.
The Energy Department is scheduled to release its weekly report at 11 a.m. tomorrow in Washington, a day later than usual because of the Presidents Day holiday.
Brent crude for April delivery traded at $75.90 a barrel, up 22 cents, on the London-based ICE Futures Europe exchange at 1:57 p.m. in Singapore. Yesterday, the contract increased $3.17, or 4.4 percent, to $75.68.

–Editors: Alex Devine, Amit Prakash.

To contact the reporters on this story: Christian Schmollinger in Singapore at +65-6212-1898 or christian.s@bloomberg.net; Ben Sharples in Canberra at +61-2-9777-8683 or bsharples@bloomberg.net.

To contact the editor responsible for this story: Clyde Russell at +65-6311-2423 or crussell7@bloomberg.net.

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