Oil Market Update (May 29, 2012)

Oil advanced for a third day straight day on signs that voters in Greece may potentially back austerity measures needed for a European Union bailout.

Brent oil for July settlement rose 28 cents to $107.11 a barrel on the ICE Futures Europe exchange on Monday.

Meanwhile, crude for July delivery also rose 29 cents to $91.15 a barrel in trading on the New York Mercantile Exchange. The price is down 7.8 percent this year and there is no floor trading in New York today because of the Memorial Day holiday.

Futures gained after Greece’s New Democracy party, who currently supports the bailout plan finally agreed with international lenders.

“The economic front is looking slightly better and the geopolitical situation a bit worse,” said Christoper Bellew, senior broker at Jefferies Bache Ltd. “There is a stronger chance of a conservative pro-euro administration in Greece, the situation in Syria appears to have deteriorated and the Iranian talks did not offer any hope of a relaxation in sanctions.”

Tensions over Iran’s nuclear program also seem to be easing amid talks between Iran and six world powers, but analysts warned that it is too early to dismiss risk factors.

Iran and the international powers “remain as far apart as ever,” according to energy consultants KBC. “So the situation remains clouded and the negotiators’ position a tricky one. Inevitably the issue will run right down to the wire.”