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Oil above US$82 on positive news for Europe banks
Source: Agencies |
October 7, 2011, Friday
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Online Edition
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OIL prices rose yesterday as Europe's central bank tried to strengthen the region's financial system.
Benchmark crude jumped US$2.91, or 3.7 percent, to finish at US$82.59 per barrel in New York, while Brent crude rose US$3, or 2.9 percent, to end at US$105.73 in London.
It was the second straight day of higher prices after they plummeted to 12-month lows earlier in the week. The drop came as credit problems in the eurozone rattled energy markets. Investors worry that a Greek default could spark a wider banking crisis that threatens the US economy and weakens demand for oil.
In an effort to deal with that the European Central Bank yesterday offered new emergency loans to banks that could shield them from possible losses.
Europe's financial problems have scared many investors out of oil markets this year, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. When Europe's situation appears to improve, investors rush back in, lifting prices, Kloza said.
A stronger Europe and world economy means demand for oil will rise.
The US economy also showed signs of strength, as major retailers posted strong sales increases in September.
In other energy commodities trading, heating oil rose 8 US cents to finish at US$2.86 per gallon and gasoline futures rose 12 US cents to end at US$2.69 per gallon. Natural gas rose 3 US cents to end the day at US$3.60 per 1,000 cubic feet.
Benchmark crude jumped US$2.91, or 3.7 percent, to finish at US$82.59 per barrel in New York, while Brent crude rose US$3, or 2.9 percent, to end at US$105.73 in London.
It was the second straight day of higher prices after they plummeted to 12-month lows earlier in the week. The drop came as credit problems in the eurozone rattled energy markets. Investors worry that a Greek default could spark a wider banking crisis that threatens the US economy and weakens demand for oil.
In an effort to deal with that the European Central Bank yesterday offered new emergency loans to banks that could shield them from possible losses.
Europe's financial problems have scared many investors out of oil markets this year, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. When Europe's situation appears to improve, investors rush back in, lifting prices, Kloza said.
A stronger Europe and world economy means demand for oil will rise.
The US economy also showed signs of strength, as major retailers posted strong sales increases in September.
In other energy commodities trading, heating oil rose 8 US cents to finish at US$2.86 per gallon and gasoline futures rose 12 US cents to end at US$2.69 per gallon. Natural gas rose 3 US cents to end the day at US$3.60 per 1,000 cubic feet.
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