CRUDE OIL UPDATE

Crude oil futures broke above $88 a barrel in Asia electronic trades today as Greece's international lenders reached a deal on a new debt target, however worries about a looming U.S. fiscal crisis kept a lid on gains.

The euro hit a one-month high and Asian shares climbed for a seventh straight day after euro zone finance ministers and the International Monetary Fund agreed on a package of measures to reduce Greek debt needed to release another tranche of loans to the near-bankrupt economy.

Oil prices were also supported by a softer dollar. The dollar moved lower after news of the Greek deal broke, with the U.S. unit trading at 82.00 yen early Tuesday, down from ¥82.17 in late North American action Monday.

Market attention is now expected to focus on the fiscal policy standoff in the United States. A lack of progress on that front will muddy the outlook for demand from the United States, the world's top oil consumer.

Republicans in the U.S. Congress on Monday called on President Barack Obama to detail long-term spending cuts to help solve the country's fiscal crisis, while holding firm against the income tax rate increases for the wealthy that Democrats seek.

The fiscal cliff's approximately $600 billion in tax hikes and spending cuts thats would begin in 2013 would push the U.S. economy back into recession, according to the non-partisan Congressional Budget Office.

NYMEX light sweet crude oil futures are trading higher by 23 cents at $87.97 per barrel in Asia electronic trades today. MCX December crude oil futures are expected to open today’s session near Rs 4900 levels with resistance near Rs 4935 levels.

CRUDE OIL UPDATES

Strong manufacturing growth in China and decline in supplies of Crude oil in US resulted in prices getting elevated on NYMEX platform. The truce between Hamas and Israel didn't affect the short term bull run in the prices. Israel and Hamas decided to halt eight days of attacks against each other on Wednesday. World second largest consumer China imported 23% less Crude from Iran.

The total imports of Crude oil from Iran were 458000 barrels per day, as per General Administration of Customs data. The benchmark Light Sweet Crude oil for January delivery tested a weekly high of $ 89.28 per barrel and settled at $ 88.28 per barrel, up 1.5%. From the lows of $ 84.53 per barrel on 7 November 2012, Crude oil has made a steady progress on the back of geopolitical tensions.

After Israel and Hamas it was Egypt where protests began between supporters and opponents of Egypt President Mohammed Morsi gave himself sweeping new powers. Supporters and opponents clashed on the streets across the country days after a cease fire were declared between Israel and Hamas militants in the Gaza Strip.

Energy Information Administration (EIA) last night reported a surprise decline in Crude Oil inventories. The weekly oil report from the Energy Information Administration revealed U.S. crude oil inventories decreased by 1.50 million barrels and gasoline stocks shed 1.50 million barrels in the week ended November 16.