Sunday, November 21, 2010

Crude Oil Rises as Irish Bailout Plan May Ease Concern Over European Debt

Crude oil rose, rebounding from its biggest weekly loss in three months, amid optimism that an agreement to rescue Ireland’s banks may reduce European sovereign debt concerns. Futures retraced some of last week’s 4 percent slump after Ireland yesterday applied for a bailout from the European Union and the International Monetary Fund to save its banks. The decision pushed the euro to a one week high versus the dollar, boosting the appeal of commodities to investors.

“The euro debt concerns are easing as Ireland has decided to accept the bailout and that will lead to a weaker dollar,” said Serene Lim, a commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “It’s more of the dollar weakening that’s helping to drive oil higher.” The January contract gained as much as 64 cents, or 0.8 percent, to $82.62 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.50 at 12:25 p.m. Singapore time. It slipped 44 cents, or 0.5 percent, to $81.98 on Nov. 19. Futures are up 3.7 percent this year.

The December contract expired on Nov. 19, down 34 cents, or 0.4 percent, at $81.51 a barrel. Crude fell at the end of last week after China ordered banks to raise reserves in a move that may slow growth and crimp fuel demand in the world’s largest energy consuming country. “The Irish debt situation has been contained for the moment,” said David Taylor, a market analyst at CMC Markets Ltd. in Sydney......Read the entire article.

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1 comment:

Scoremore said...

I think the government should resign now even before the budget is passed.

Let the people vote.

Reduction of basic wage? They unemployed will love that they are finding it very hard to make ends meet at present. The question is though is how long will it take for the basic prices to drop (incl coal).