Oil prices jumped to near $92 a barrel today in Asia after European leaders agreed on a plan to reduce Greece’s debt burden.
Benchmark crude for December delivery was up $1.60 at $91.80 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $2.97 or 3.2 per cent to settle at $90.20 in New York yesterday.
Brent crude was up 82 cents at $109.73 a barrel on the ICE Futures Exchange in London.
After a meeting that began yesterday, the EU President, Mr Herman Van Rompuy, said early today that policy-makers struck a deal that will reduce Greece’s debt to 120 per cent of its GDP in 2020. The plan will require banks to take on 50 per cent losses on their Greek bond holdings.
Mr Van Rompuy also said the eurozone and International Monetary Fund will give Greece another €100 billion ($140 billion).
Investors cheered the accord as a first step towards containing Europe’s sovereign debt crisis. The Dow Jones industrial average gained 1.4 per cent yesterday and stock markets in Asia rose today.
Crude has jumped about 21 per cent from $75 on October 4 amid growing investor optimism that the US economy will avoid a recession this year.
In other Nymex trading, heating oil rose 0.4 cents to $3.06 per gallon and gasoline futures gained 0.6 cents to $2.68 per gallon. Natural gas advanced 0.9 cents to $3.67 per 1,000 cubic feet.