By Nick Godt, MarketWatch
MUMBAI (MarketWatch) — Crude-oil futures rallied Thursday following the European Union’s deal to tackle the region’s crisis, which includes plans to have private investors take a 50% writedown on Greek debt and a fivefold increase in the euro-zone rescue fund.
Crude oil for December delivery CL1Z +2.68% gained $2.45, or 2.7%, to $92.65 a barrel in electronic trading.
On Wednesday, oil futures slumped more than 3% following a higher-than-expected increase in U.S. crude inventories while markets awaited a final word from a summit of euro-zone leaders.
This came early Thursday with European Council President Herman Van Rompuy announcing the details of the plan to provide relief to Greece, recapitalize European banks and boost the firepower of the European Financial Stability Facility to about $1.4 trillion.
The outcome was “received well by stock markets”, analysts at JBC Energy said in a note.
The implications for the growth outlook for Europe and for energy demand from the region remain unclear, however.
Analysts noted the International Monetary Fund’s call that it sees no immediate risk of another global economic recession but that it would update its forecasts following the European agreement.
Investors awaited data on U.S. third-quarter economic growth, which “could provide another boost to sentiment,” according to MF Global analysts. Economists polled by MarketWatch expect that gross domestic product rose at a 2.8% annual pace in the third quarter after growing 1.3% in the second quarter. The data are due at 8:30 a.m. Eastern time.
The U.S. Energy Information Agency is also scheduled to report weekly natural-gas inventories. Analysts polled by Platts expect an increase in inventories between 88 billion cubic feet and 92 billion cubic feet for the week ending Oct. 21.
November natural-gas futures slipped 4 cents to $3.55 per million British thermal units.
Nick Godt is a MarketWatch reporter based in Mumbai.
