* Greece expected to ask for financial aid
* Euro bounces off one-year low against dollar on Greece
* Chinese economy to grow by almost 10 percent this year-CASS
* Coming Up: U.S. durable goods for March; 1230 GMT
(Updates prices, adds detail, previous SINGAPORE)
By David Sheppard
LONDON, April 23 (Reuters) - Oil rose to $84 a barrel on
Friday after reports Greece will request financial aid saw
markets rally as the euro rebounded off a one-year low against
the dollar.
Greek media said Athens was poised to trigger the European
Union/International Monetary Fund financial aid package, citing
unnamed sources. [] Oil prices immediatedly turned
positive, reversing earlier losses as risk appetite rose.
U.S. crude for June delivery <CLc1> rose 25 cents to $83.95
a barrel by 0925 GMT, after reversing a two-dollar intra-day
drop on Thursday. It was less than $4 from an 18-month high
above $87 reached on April 6.
The dollar traded near $1.33 as the euro rose by one cent off
its earlier low. []
Analysts said earlier markets were being stymied by the
uncertainty surrounding Greece, with fears the eurozone member
may default on its debts.
"Not only is all this taking a long time to play out, but it
has also been so badly handled that we seem to be witnessing a
'death by a thousand cuts'," MF Global commodities analyst
Edward Meir said.
"Amid this turmoil, we would not be surprised to see the
dollar continue to strengthen in the weeks ahead, and likely
test, and perhaps even break, the $1.30 level against the euro.
Such strength should deter any meaningful rallies in the crude
oil market."
Sentiment towards Greece soured on Thursday after the
European Union said Greece's budget deficit was worse than
feared and rating agency Moody's cut its rating of Greek
government debt, heightening risk aversion across markets.
[]
SPRING DEMAND
A stronger dollar tends to dampen commodity prices as they
become more expensive for holders of other currencies, though
demand in booming Asian economies, including China and India,
remains unabated this year and is set to grow seasonally in the
agriculture and transport sectors.
"We are going to see more demand coming in spring and summer
and that is going to push prices higher," said Peter McGuire,
managing director of Commodity Warrants Australia in Sydney,
adding that he expected oil to approach $90 in June.
The front-month U.S. crude contract was heading for its
first weekly increase in a fortnight, shrugging off rising
domestic stockpiles of crude and oil product inventories.
But U.S. crude was still trading almost $2 below ICE Brent
for June <LCOc1>, the benchmark for most of Europe, Africa and
Asia, which rose 49 cents to $86.16 a barrel.
Most traders consider Brent better represents world oil
balances because U.S. crude prices can be locally affected by
gluts at the land-locked Cushing, Oklahoma pricing point, where
stocks jumped last week.
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For a graphic of U.S. crude and Brent futures and their recent
divergence, click on:
http://graphics.thomsonreuters.com/gfx/SBrb_20102204104405.jpg
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China's economy will probably grow by about 9.9 percent this
year, compared with a previous outlook of 9.1 percent, according
to forecasts by the Chinese Academy of Social Sciences (CASS)
published on Friday. []
Prices were also supported by improving business sentiment
in Germany, the world's third largest economy, with a closely
watched survey showing the brightest outlook from 7,000 firms
since May 2008. []
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey)
