Oil prices rebounded in Asia today but analysts said that the sentiment remains hobbled by fears that deadlock in the Italy elections could derail the euro zone’s nascent recovery.

Just as the euro zone’s woes appeared to be easing, the results of the Italy elections, which reflected strong public sentiment against austerity measures, spooked the global financial markets.

New York’s main contract, light sweet crude for delivery in April, climbed 19 cents to $92.81 a barrel, while Brent North Sea crude for April delivery gained 18 cents to $112.89. Both contracts fell in the overnight trade.

“The prospects for a hung Parliament in Italy and concerns that the country may need new elections continue to roil the markets,” said Phillip Futures in a market commentary.

“The vote result has stoked fears that the country’s politicians would be unable to form a government strong enough to continue the effective reforms.”

Results of Sunday’s vote point to a centre-left majority in the Lower House, but no clear majority in the Senate, which could result in political instability.

Italy, the third biggest economy in the euro zone after Germany and France and a founding member of the euro, is struggling with rising unemployment and massive debts.

(This article was published on February 27, 2013)
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