New York's main contract, light sweet crude for delivery in March rose to almost US$105, Brent North Sea crude for April delivery inched past US$120. Oil prices surged on news of eurozone finance ministers signing a deal on a massive new bailout for Greece. The deal will bring government debt in Athens down to "120.5%" of gross domestic product (GDP) by 2020. This means a 5.5 bln euro gap in funding was reached to bring it down from an estimated 129%.
The optimism was reigned in on discovery that the bailout will not be a cure-all for Greece's problems and will have to be accompanied by reforms implemented by Athens. Also, the initial panic caused by Iran's decision to halt oil sales to France and Britain, is fading out as traders realised this was part of Tehran's brinkmanship strategy.
Other factors driving up prices include last month's bankruptcy of European refiner, and a recent BP refinery fire in Washington state that has temporarily impacted gasoline supply along the West Coast, and growing fear of a military confrontation with Iran in the Persian Gulf's Strait of Hormuz, through which 20% of the world's oil passes. Financial speculators are piling into the market, torquing the Iranian fear factor into ever-higher prices.
U.S. demand and consumption patterns are so abnormal compared to recent decades that oil and gasoline are both now being exported to Europe, Asia and Latin America. Exports of U.S. refined product averaged 2.928 mln bpd over the four weeks ending on Feb. 10, compared to 2.190 mln bpd for the four weeks ending Feb. 11, 2011, the EIA said. This category is primarily gasoline, but it includes unfinished oils, fuel additives, ethanol and other blending components. USA did not export any oil in the four weeks ending Feb. 11, 2011, but in the four-week period ending this Feb. 10, the nation exported 37,000 barrels.