By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Benchmark U.S. crude-oil futures jumped in electronic trading Friday after European leaders unveiled a plan to address the region’s distressed banking sector.
Crude for August delivery CLQ2 +2.43% climbed $1.64 cents, or 2.3%, to $79.44 a barrel on the New York Mercantile Exchange during Asian trading hours.
The gains came after oil hit an eight-month low in Thursday’s session, weighed by jitters ahead of a two-day European leaders’ summit.
With the aim of tackling the region’s swelling financial crisis, few investors had faith the summit would do much to solve to Europe’s troubles.
But in the early hours of Friday morning, European Union leaders announced a plan for a single financial supervisor for the region, as part of short-term measures to help stabilize markets.
European Commission President Herman van Rompuy said that the mechanism will involve the European Central Bank and that there will be the possibility of direct recapitalization for European banks. Read more on European announcement.
Risk-tied crude and equity markets shot up following the announcement, and the euro rallied. Read more in Asia Markets.
Virginia Harrison is a MarketWatch reporter based in Sydney.
