The oil complex strengthened Tuesday after Greece made a last-ditch effort to secure new bailout funds, while Iranian nuclear negotiators extended their midnight deadline by a week.
ICE August Brent settled $1.58 higher at $63.59/b, rebounding from Monday when the front-month contract tested the 100-day moving average of $62/b. NYMEX August crude settled up $1.14 at $59.47/b.
The front-month ICE Brent-WTI spread eclipsed $4.00/b for the first time since June 12, reaching as wide as $4.30/b, compared with a $3-$4/b range seen from June 15 through Monday.
NYMEX refined product futures rallied on expiration. July ULSD settled 5 cents higher at $1.8866/gal. July RBOB settled 5.93 cents higher at $2.0896/gal.
August RBOB settled 4.61 cents higher at $2.0494/gal. That was enough to drive the August gasoline crack to Brent about 36 cents higher to $22.48/b.
One factor supporting RBOB prices Tuesday was Marathon Oil possibly taking offline the fluid catalytic cracker at its 522,000 b/d Garyville, Louisiana, refinery, according to Again Capital partner John Kilduff.
Talk of an FCC being shut at one of the Gulf Coast's largest refineries strengthened gasoline differentials Tuesday on the Gulf Coast, Atlantic Coast and Midwest, as market sources were concerned about supplies ahead of the Fourth of July weekend.
A surprise proposal by the Greek government seeking a two-year bridge loan from the eurozone bailout fund, known as the European Stability Mechanism, came just hours before its current bailout expired and Athens was due to make an IMF repayment worth Eur1.6 billion ($1.8 billion).
"Greece is not going off the rails, and that's helping Brent," Kilduff said.
Eurozone finance ministers gathered in Brussels Tuesday evening to consider Greece's latest proposal.
"A wide range of markets have reversed direction in Tuesday trade, beginning with a 5.5% rally in Shanghai stocks and continuing in European trade on talk that a last minute Greek debt deal may still be possible," Citi Futures and OTC Clearing analyst Tim Evans said in a morning note.
In Vienna, the six world powers and Iran agreed to extend by one week Tuesday's deadline to reach a nuclear deal, a US Department of State official said Tuesday.
"The P5+1 and Iran have decided to extend the measures under the Joint Plan of Action until July 7 to allow more time for negotiations to reach a long-term solution -- a Joint Comprehensive Plan of Action -- on the Iran nuclear issue," said State Department spokeswoman Marie Harf.
An agreement is expected to include the lifting of sanctions on Iran's oil sector, likely causing an increase in Iranian production and exports to the global market.