ET:Oil rallies in Asia as eurozone debt concerns ease
SINGAPORE: Crude prices soared in Asia today on reports that the IMF could bail out Italy as European giants France and Germany explored more radical measures to shore up the eurozone, analysts said.
New York's main contract, light sweet crude for delivery in January, gained USD 1.63 to USD 98.40 per barrel.
Brent North Sea crude for January delivery rose USD 1.20 to USD 107.60.
Reports that the International Monetary Fund (IMF) was considering a 600 billion euro (USD 800 billion) bailout for Italy "could be one of the factors" behind the crude rally, said Ker Chung Yang, commodity analyst for Phillip Futures in Singapore.
Italian newspaper La Stampa yesterday reported that the IMF was considering the bailout to allow Prime Minister Mario Monti a 12 to 18-month lifeline to implement urgent budget cuts and growth-boosting reforms in the heavily indebted country.
Oil was also reacting to news that Germany and France had over the weekend looked at ways to deepen and hasten fiscal integration across the eurozone to defend the region against its debt crisis, Ker added.
"I think we can see that crude oil prices have been rising on optimism after Germany and France discussed more radical measures... in finding a solution to the eurozone debt crisis," he said.
The two European giants yesterday discussed methods of imposing tighter budget controls over eurozone nations via a zonal agreement or a separate compact outside of the European Union treaty involving around eight to ten nations, news reports quoted EU sources as saying.
