Thursday, 07 June 2012 05:28
NEW YORK: Oil prices headed higher Wednesday, joining stock markets in welcoming the European Central Bank's signals of support to ailing eurozone banks.
The ECB's keeping interest rates on hold rather than cutting them also helped the euro strengthen, pulling crude prices up with it.
New York's main contract, West Texas Intermediate crude for delivery in July, ended the day at $85.02 a barrel, up 73 cents from Tuesday's closing level.
In London, Brent North Sea crude for July, added $1.80 to settle at $100.64 a barrel.
Both contracts closed significantly off earlier gains.
"A slight brightening of sentiment on the financial markets and a weaker USdollar are putting wind in the sails of oil," said Commerzbank analyst Carsten Fritsch.
A weaker greenback makes dollar-priced oil more attractive to buyers with stronger currencies, tending to drive demand.
European and US stock markets shot higher Wednesday, with sentiment helped by the European Central Bank's decision to keep cash flowing to beleaguered eurozone banks even as it left interest rates on hold at 1.0 percent.
Prices were also buoyed after European finance chiefs in the Group of Seven vowed Tuesday to respond "speedily" to the eurozone debt crisis.
Traders meanwhile shrugged off news both of a smaller-than-expected decline in petroleum stockpiles in the United States, and the Federal Reserve's Beige Book report on regional economies which gave no sign of any weakening in the "moderate" pace of growth.
Copyright AFP (Agence France-Presse), 2012