Oil climbs above $79

By Edward McAllister

NEW YORK (BestGrowthStock) – Oil rose nearly $1 to top $79 a barrel on Tuesday as signs of progress in securing European financial backing for Greece lifted economic optimism.

The oil market awaited weekly U.S. inventory data from industry group the American Petroleum Institute (API) due later on Tuesday and from the U.S. government on Wednesday.

U.S. crude for April delivery rose 98 cents to settle at $79.68 a barrel, off intraday highs that saw crude trade up to $80.95 a barrel.

Prices have traded in a range between $69 and $84 a barrel since last October, but $80 a barrel is being eyed as a key resistance level, analysts said.

In London, ICE Brent for April delivery rose $1.29 to settle at $78.18.

“Crude is going to remain volatile and subject to currency influences as the crisis focus meanders between the euro zone and the U.K. There is enough positive economic data out there to keep prices near the $80 level,” said John Kilduff, partner at Round Earth Capital in New York.

The euro rebounded from a 9-1/2 month low against the dollar on Tuesday as investors awaited new plans to address Greece’s debt crisis and held out hope for some type of help from the European Union.

Greece’s borrowing costs fell to their lowest level in weeks as its government is expected to announce new austerity measures to win European debt guarantees for the cash-strapped European Union member.

Oil prices have often risen over the past year when the dollar weakens, making crude less costly for holders of other currencies.

U.S. stocks (Read more about the stock market today. ) headed for a third straight day of gains on Tuesday as investors drew cheer from more mergers and acquisitions and signs of progress in securing European financial backing for Greece.

Tuesday’s advance briefly pushed the Dow index into positive territory for 2010, a day after both the S&P 500 and Nasdaq indexes moved above the break-even mark for the year.

(.N: )

Investors have looked to wider economic data over the past year for signs of economic recovery and a potential rebound in energy demand.

During a conference call, BP (BP.L: ) Chief Executive Tony Hayward said that 1 million barrels per day (bpd) of refinery capacity could be shut in Europe, the United States and Japan this year.

STOCKS AND SUPPLIES

Analysts forecast data from the API due out later on Tuesday and from the Energy Information Administration (EIA) due out on Wednesday would show a 1.4 million-barrel increase in crude stocks, a 900,000-barrel decline in distillates and a 600,000-barrel increase in gasoline.

OPEC meets next on March 17 and ministers are already suggesting there will be no change to current output quotas.

“Despite the fact the global economy is gradually recovering, demand has not increased significantly enough to make us reconsider our production ceiling,” Iraqi Oil Minister Hussain al-Shahristani told Reuters.

Crude oil markets remained well supplied, United Arab Emirates Oil Minister Mohammed al-Hamli said. He said prices between $70 to $80 per barrel were acceptable to producers.

Top world oil exporter Saudi Arabia cut the official selling price of most of its crude grades in April to customers in Asia and raised most prices to the United States, the state oil company said on Tuesday.

The Kingdom’s oil production is still down compared with 2008, having fallen in 2009, state oil company Saudi Aramco’s chief executive was reported as saying on Tuesday.

Stock Investing

(Additional reporting by Robert Gibbons and Gene Ramos in New York and Jo Winterbottom in London; Editing by Lisa Shumaker)

Oil climbs above $79