Oil Falls As Greece Fails To Nail Down Debt Agreement

Published on Monday, 06 February 2012 17:24 Written by Todd Shriber

New York, February 6^th (TradersHuddle.com) – An agreement to help Greece avoid a sovereign debt default, an idea that has months if not over a year in the making, will have to wait another day and those drab headlines forced NYMEX-traded crude for March delivery down 93 cents, or 1%, to $96.91. Brent crude for March delivery rose $1.35, or 1.2%, to settle at $115.93 a barrel. The spread between the two contracts is the widest it has been since November 7.

European policymakers are pressing Greece to accept the terms of international creditors, but Greece is resisting, a familiar tactic that has delayed real progress and staving off default for the country. Even if Greece is somehow able to skirt a default on its bonds, traders are already becoming skittish that Portugal will become the next European shoe to drop. Problems for Portugal would likely add to the Euro Zone’s growth woes and further weigh on oil demand.

In other global news, the Movement for the Emancipation of the Niger Delta (MEND) stated it would escalate attacks on a pipeline in Nigeria owned by Italian oil giant Eni SpA (NYSE: E). OPEC member Nigeria is Africa’s largest oil exporter and MEND has previously hampered output there by attacking assets owned Western oil majors such as Royal Dutch Shell (NYSE: RDS-A), Europe’s largest oil company, and Chevron (NYSE: CVX), the second-largest U.S. oil company.

Here in the U.S., politics is once again playing a role in the development of this country’s oil resources. A new plan by the federal government will see 35,308 acres in Colorado, 252,181 acres in Utah, and 174,476 acres in Wyoming available for oil shale research, according to the Associated Press. Another 91,045 acres in eastern Utah would be used for tar sands research, but those numbers are well below the 2 million acres for shale and 431,000 acres for tar sands development set aside by the Bush Administration.

Looking at oil equities, it was a decent day for the big oil names as Dow components Exxon Mobil (NYSE: XOM) and Chevron were both higher by about 1%. ConocoPhillips (NYSE: COP) and Occidental Petroleum (NYSE: OXY) were also both higher by more than 1%.

In the after-hours session, Anadarko Petroleum (NYSE: APC) was up 1.4% despite reporting a fourth-quarter loss of $358 million, or 72 cents a share.

"These results include certain items typically excluded by the investment community in published estimates. In total, these items decreased net income by approximately $781 million, or $1.57 per share (diluted) on an after-tax basis.Cash flow from operating activities in the fourth quarter of 2011 includes a $4 billion payment to settle the BP dispute. This resulted in negative cash flow from operating activities for the fourth quarter of $2.087 billion. Discretionary cash flow for the quarter totaled $1.752 billion," Anadarko said in a statement.

The company added it replaced 159% of production and that it achieved an 80% success rate in offshore exploration and appraisal drilling programs.