Crude dips on lingering Greece concerns, U.S. demand

Forexpros - Crude oil futures fell on Wednesday as concerns grew that Greece's recent EUR130 billion won't be enough to rid the country of its problems, while sentiment brewed that stockpiles in the U.S. may be rising, indicating softening demand.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at USD105.88 a barrel, down 0.35%.

The commodity hit an earlier session high of USD106.07 and a low of USD105.72.

Oil soared on news that European finance ministers agreed to hand over EUR130 billion in rescue funding to Greece, which doused fears the country would miss a bond payment in March and run through a messy default.

A default would have cooled an already chilly European economy, and crimp oil demand in the process.

However, Greece has sought and received bailout money in the past, only to see its financial woes return anew.

Furthermore, the country agreed to politically unpopular austerity measures such as pension reform and public-sector layoffs in exchange for the funding.

Agreeing to austerity is one thing, but pushing it through is another, and some investors were concerned the country would run into a fresh set of problems until its economy makes fundamental improvements.

Furthermore, rising gasoline prices in the U.S. may be prompting motorists to put off driving, which would send stockpiles rising and the need for fresh crude falling.

Tensions with Iran have sent oil prices soaring, although profit-taking set the pace in early Asian trading on Wednesday.

On the ICE Futures Exchange, Brent oil futures for April delivery were up 0.06% and trading at USD121.29 a barrel, up USD15.41 from its U.S. counterpart.

The gap in price between the two contracts is pushing toward the higher end of a range between a nearly USD20.00 all-time high and a historical spread of USD1.00.