Crude oil futures prices ended modestly higher Tuesday ahead of a crucial vote in Greece that could steer the country out of its latest debt crisis.
Gains were capped by worries over sluggish U.S. oil demand, which sent gasoline and heating oil prices down for a third straight day.
Before a Greek bailout package can be put in place, the government of Prime Minister George Papandreou faces a confidence vote in parliament around 2100 GMT (5 p.m. EDT). If successful, the next hurdle would be parliamentary approval for an austerity program that would clear the way for further loans from the European Union and the International Monetary Fund.
"Everyone is looking at the Greece situation," said Phil Flynn, an analyst at PFGBest in Chicago. "The market's showing a little bit of uncertainty as to what's going to happen next."
Light, sweet crude oil for July delivery, which expired at the settlement, went off the board at $93.40 a barrel, up 14 cents from a day earlier. August crude, the new front-month contract, settled 54 cents higher, at $94.17 a barrel. Settlement prices weren't yet available for ICE August Brent crude, but late in the day, the contract was down 86 cents, at $110.83 a barrel, on course for the lowest settlement in a month. The Brent premium to the Nymex contract was below $17.50 a barrel, the lowest level since June 8 and compared with the record of $22.29 a barrel set last week.
Traders said there was little inspiration for crude to push higher, as U.S. stockpiles stand at 21-year highs for this time of year and the economic recovery continues to sputter. Existing-home sales in May fell to a six-month low, while the median sales price dropped 4.6% from a year earlier, the National Association of Realtors said Tuesday.
"A lot of negative economic news continues to bubble to the surface and is continuing to weigh on the market," said Gene McGillian, broker and analyst with Tradition Energy in Stamford, Conn. Prices hit four-month lows near $91 a barrel in recent days. "We're seeing tepid demand levels," he said, adding that if that weakness results in growth in inventories of products like gasoline and diesel fuel, crude, could again make a run for $90 a barrel or below.
Analysts expect U.S. oil inventory data for the week ended June 17 to show crude stocks fell by a modest 800,000 barrels from a week ago, while refiners boosted operations by a slim 0.3 percentage point from a week ago. Gasoline stocks were expected to post a 800,000-barrel-gain, with distillate stocks (diesel/heating oil) up 500,000 barrels. Data from the American Petroleum Institute, an industry trade association, are due out at 4:30 p.m. EDT on Tuesday, while the federal Energy Information Administration report for the same period is set for release at 10:30 a.m. EDT on Wednesday.