Published On: Thu, Sep 29th, 2011

Oil near $81 ahead of Europe debt fund vote

BANGKOK – Oil prices hovered above $81 a barrel Thursday in Asia as traders looked to Germany to approve a measure to strengthen

a fund intended to help Europe overcome its debt crisis.

Benchmark oil was up 16 cents to $81.37 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $3.24, nearly 4 percent, to $81.21 per barrel on the Nymex on Wednesday.

In London, Brent crude for November delivery was up 19 cents at $104.00 on the ICE Futures exchange.

Oil rose sharply earlier this week as Europe appeared to get a better handle on its debt crisis. But signs of disagreement resurfaced among European leaders on how best to help Greece, which only has enough money to pay its bills through mid-October.

The country risks a default on its massive debts, an event that could spiral into a major financial and banking crisis across the continent. Some experts say a Greek default could lead to a global recession, thus hurting demand for oil.

Falling petroleum consumption in the U.S. was another factor weighing on oil prices. The Energy Department reported Wednesday that gasoline demand last week dropped 2.4 percent from the same time last year. U.S. crude supplies grew by 1.9 million barrels last week. Analysts thought oil supplies would remain unchanged.

On Thursday, commodities traders turned their attention to Germany’s parliament, which was set to vote on a measure to give a European rescue fund more powers to fight the debt crisis. Finland’s parliament approved the proposal Wednesday.

“So far this week, prices have soared and plunged on the latest temperature of voters in Germany and Finland,” Cameron Hanover said in a report.

“The world’s entire investment community seems to be waiting for a resolution of an extremely knotty sovereign debt crisis,” the report said.

Crude oil has fallen about 15 percent since July and is down 26 percent since hitting a high for the year of $113.93 per barrel on April 29.

In other energy trading, heating oil rose 1 cent to $2.83 per gallon, gasoline futures rose 11 cents to $2.64 per gallon and natural gas was down 1 cent at $3.79 per 1,000 cubic feet.

 

Source : old.news.yahoo.com