Oil rises on Greek debt hopes, Iran concerns

LONDON—World oil prices swung higher on Thursday as the euro gained on hopes Greece’s debt swap would be successful, with tensions over Iran also supporting the crude market, analysts said.

New York’s main contract, light sweet crude for delivery in April, added 76 cents to $106.92 a barrel.

Brent North Sea crude for April won $1.19 to $125.31 in London morning trade.

Prices rallied, in line with global stock markets, on mounting optimism that Greece’s debt swap would be successful and after strong US jobs data.

The European single currency jumped to $1.3215 on Thursday from $1.3148 late in New York on Wednesday. The weaker greenback makes dollar-priced crude cheaper for buyers using stronger currencies, thereby stimulating demand.

“As sentiment brightens on financial markets, oil prices have made considerable gains since yesterday… making good the losses they suffered in the first half of the week,” said Commerzbank analyst Carsten Fritsch.

Greece was on Friday set to announce the results of an unprecedented bond swap with private creditors to alleviate nearly a third of its enormous sovereign debt.

Elsewhere, oil traders were taking heed of the initial effects of Western sanctions against Iran, said IG Markets strategist Justin Harper.

“Shipments of Iranian oil may have dropped about 25 percent as the threatening talks about reducing supplies from Iran are now being replaced with action. While this risk premium exists, oil will continue to face upward pressure,” he added.

The United States on Wednesday demanded verifiable assurances that Iran was not building an atomic weapon after Tehran said fresh nuclear talks would fail if they were used to pressure the country.

The prospect of new talks comes at a time of heightened tensions between Iran and its regional arch-rival Israel, and as Tehran struggles under a punishing new range of US and European Union sanctions.

Western powers and Israel suspect Iran is seeking to build a nuclear bomb under the guise of a civilian atomic program, a charge consistently denied by Tehran, which says its nuclear drive is for peaceful purposes.