Oil near $93 as EU plans talks on Greek debt vote

[November 02, 2011]  SINGAPORE (AP) -- Oil prices rose to near $93 a barrel Wednesday in Asia amid news the Greek prime minister has been summoned by the leaders of Germany and France to explain his surprise decision to hold a referendum on the debt-stricken country's latest rescue package.

Benchmark crude for December delivery was up 75 cents at $92.94 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1 to settle at $92.19 in New York on Tuesday.

Brent crude was up 47 cents at $110.01 a barrel on the ICE Futures Exchange in London.

Greek prime minister George Papandreou said earlier this week that he would call a referendum vote on the agreement to cut Greece's debt level, provide the country's fresh rescue loans and require bondholders to accept 50 percent losses.

Greek labor unions have protested fiscal austerity measures, and if voters reject the debt plan, it could spark a chaotic debt default and a financial crisis.

Papandreou also faces a vote of confidence in parliament Friday, which if he loses, could scuttle the referendum.

German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed to hold emergency talks on Greece with the EU and the IMF on Wednesday.

"The euro zone sovereign debt issue that provided a large burst of risk appetite last week has flipped to a major bearish factor this week as the Greek debt situation is suddenly again looking precarious," energy consultant Ritterbusch and Associates said in a report.

Trading volumes of oil futures have been undermined this week by the bankruptcy of MF Global, a U.S. securities firm run by former Goldman Sachs chief Jon Corzine.

Signs that U.S. crude demand may be improving helped support prices. The American Petroleum Institute said late Tuesday that crude inventories fell 156,000 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.1 million barrels.

Inventories of gasoline fell 1.1 million barrels last week while distillates dropped 3.4 million barrels, the API said.

The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.

In other Nymex trading, heating oil rose 0.6 cent to $3.04 per gallon and gasoline futures gained 1.9 cents at $2.64 per gallon. Natural gas dropped 1.9 cents at $3.76 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

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