By Claudia Assis & Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) -- Crude futures rose more than 2% Monday as investors cheered the EU's $970 billion rescue plan and on a rebound from last week's sharp declines.
Crude for June delivery, the most active contract, rose $1.91, or 2.7%, to $77.08 a barrel on the New York Mercantile Exchange. The contract hit an intraday high of $78.52 earlier.
The European Union's financial-stabilization plan reassured investors and encouraged them to buy assets perceived as risky such as commodities and stocks.
European leaders Sunday agreed to a sweeping plan worth 750 billion euros ($970 billion) that included plans to purchase government and private bonds. Read more.
"The package should help commodities to recover after the huge selloff the last couple of days," said analysts at Danske Bank. "In our view, the global demand for commodities is still strong and has not been affected in any meaningful way."
The combined action plan is the boldest yet to come from European leaders in response to the Greek debt crisis that has rattled global markets and threatened to undermine financial stability in the whole euro zone.
U.S. stocks soared Monday as investors cheered the package. The euro rallied, gaining 1.7% to $1.2968 in afternoon trading, moderating its gains to $1.286 later in the day.
Further helping oil, Chinese oil imports came in at a record of 5.165 million barrels per day, up 31% on-year. "We continue to see extremely strong growth from the country, " analysts at Barclays said in a note to clients Monday.
The United States Oil Fund LP (USO 36.96, +0.65, +1.79%) , an exchange-traded fund backed by oil, rose 3.6%.
Oil futures dropped 13% last week, as traders sold crude on fears that the Greek debt crisis would spread to other euro-zone nations and hamper the global economic recovery. See Friday's Futures Movers.
"Now that the [European Union] is taking a much more serious stance towards this crisis, I think the market will stabilize and refocus on the positive economic data coming out" of the U.S., said Robert Nunan, an assistant general manager at Mitsubishi Corp. in Tokyo, he said.
Several key oil-market reports will be released this week, with the Organization of the Petroleum Exporting Countries publishing on Tuesday, followed by the International Energy Agency and the U.S. Department of Energy on Wednesday.
