Crude oil futures jump on Greece austerity vote, Iran fears

Forexpros - Crude oil futures advanced on Monday, trading close to a two-week high after Greece’s parliament approved austerity measures needed to secure a bailout and avert a sovereign debt default, while lingering concerns over a disruption to Iranian crude exports lent further support.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at USD100.25 a barrel during European morning trade, jumping 1.23%.

It earlier rose by as much 1.3% to trade at a session high of USD100.30 a barrel.

Greek lawmakers approved on Sunday a set of spending and wage cuts needed to secure the country’s EUR130 billion bailout package and avoid a sovereign debt default.

The controversial austerity measures were approved by a 199-74 vote, with 27 lawmakers abstaining from the vote, according to reports.

Attention now shifts to a meeting Wednesday of euro zone finance ministers, who will discuss the approval of the debt-laden country’s second bailout before a March 20 deadline.

Greece has a EUR14.5 billion bond repayment due on March 20 and requires the bailout funding in order to be able to make that payment and avoid a messy default.

Euro zone developments have dominated trading in the oil market for the last several months, amid worries that the sovereign debt crisis could trigger a broader economic slowdown that would curb demand for oil.

The news helped push the euro higher against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, shed 0.48% to trade at 78.73.  

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Meanwhile, oil traders continued to monitor a potential disruption to Iranian oil exports after companies controlling more than 100 supertankers said they would stop loading cargoes of crude from Iran, tightening sanctions on the world’s fourth largest oil producer.   

Meanwhile, Iranian President Mahmoud Ahmadinejad said over the weekend that he will unveil “major nuclear accomplishments” in coming days, according to the state-run Press TV news channel.

Iran pumped nearly 5% of the world's oil in 2010. The threat of a major supply disruption from the country has helped support oil prices in recent weeks.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery added 0.93% to trade at USD117.84 a barrel, with the spread between the Brent and crude contracts widening to USD17.59 a barrel.

Brent prices have outperformed crude in recent sessions amid concerns over a disruption to supplies from African producers, Nigeria and South Sudan, as well as a spell of freezing weather in Europe.