Oil prices rise on eve of Greek vote

Wednesday, June 29, 2011

NEW YORK -- Oil climbed more than 2 percent Tuesday ahead of a vote in Greece to approve tough new financial reforms that would shore up its beleaguered economy.

Benchmark West Texas Intermediate gained $2.28, or 2.5 percent, to settle at $92.89 per barrel Tuesday on the New York Mercantile Exchange. In London, Brent crude added $2.79, or 2.6 percent, to settle at $108.78 per barrel on the ICE Futures Exchange.

On its own, Greece's financial trouble wouldn't normally move world oil prices. But analysts say that if the country fails to pay its bills, its problems could spread to neighboring countries and undercut the European Union's economy.

The euro strengthened against the dollar, and that pushed oil higher. Oil, which is priced in U.S. currency, tends to rise as the dollar weakens and makes crude barrels cheaper for investors holding foreign money.

Greek lawmakers will vote today and Thursday on a $40 billion austerity plan. Riots broke out in Athens Tuesday as lawmakers mulled new taxes, spending cuts and other reforms.

The austerity plan is required for the country to receive bailout money from the European Union and the International Monetary Fund.

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