NYMEX March crude futures settled $2.60 higher at $105.84/barrel Tuesday after rallying to a more than nine-month high on concerns about global supply issues and a eurozone finance ministers agreement on a rescue plan for Greece.
March crude traded up to $106.07/b -- the highest since May 5, 2011 -- on the contract's day of expiration.
Also adding to the upside was news that China will ease its benchmark bank reserve requirements ratio -- the second reduction in three months -- and ongoing tension from Iran, which is looking to extend a ban on oil exports beyond Britain and France to other European countries.
"Headline fundamental news over the long weekend was supportive on balance, with China trimming the bank reserve ratio, Greece to receive its much-awaited rescue package, and Iran cutting off its (minimal) exports to the UK and France, as well as rattling a few more sabers," energy analyst Tim Evans of Citi Futures Perspective said in a note. "The details beneath the surface are likely less supportive, but at least for now the bullish market sentiment has been supported."
Finance ministers sealed an unprecedented deal early Tuesday for a new EUR237 billion ($313 billion) bailout designed to keep Greece in the eurozone, according to an AFP report.
Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said crude prices maintained gains following the further escalation of tensions between the EU and Iran, which came against a backdrop of ongoing supply outages in South Sudan, Yemen and Syria.
March RBOB moved to its highest level since August 2, 2011, then settled at $3.0702/gal, up 5.46 cents. March heating oil settled up 5.04 cents at $3.2393/gal after it traded up to $3.2481/gal, matching a May 3, 2011, high.
ICE April Brent settled at $121.66/b. up $1.61, after hitting a more than nine-month high of $121.88/b.
NYMEX front-month crude futures have pierced recent resistance at $103.74/b and moved above last summer's congestion zone around $104-$106/b, said Mike Fitzpatrick of Kilduff Report.
"This leaves the way open for a test of last spring's high near $115.00," Fitzpatrick said. "However, a reversal back below resistance, now support, at $103.74-$103.90, may be an early signal of a reversal back down."
In that, support at $98/b needs to be broken before $95.44/b will be re-tested and support there should prove fairly stiff, Fitzpatrick said.
"But the break of the recent highs forces us to move our bias for higher, at least temporarily," he said.
