Oil
prices rose on Tuesday amid rumours that eurozone nations are planning steps to
rescue debt-addled nations, analysts said.
New York's main contract, light sweet crude for delivery in
November, surged $1.41 to $81.65 per barrel in the afternoon.
Brent North Sea crude for November delivery rose $1.15 to
$105.09.
Crude prices rallied on reports the eurozone was considering
radical and bold measures to prevent Greece and other nations from defaulting
on their debts, analysts said.
"(Oil prices) are rebounding from a six-week low on
optimism that the European offices will help Greece to ease its debt burden and
that of the eurozone debt crisis," said Ker Chung Yang, commodity analyst
for Phillip Futures in Singapore.
And VTB Capital economist Neil MacKinnon said: "Weekend
press reports... suggest that EU policymakers are looking at a three-pronged
plan which involves leveraging the firepower of the EU's rescue fund up to 3.0
trillion euros, a recapitalisation of vulnerable eurozone banks and an orderly
Greek debt default."
However, there have been mixed messages from the region, with
Germany hosing down a push to expand a stability fund designed to quarantine
the eurozone in the event of crisis, and fend off the threat of another global
recession.
EU economic Affairs commissioner Olli Rehn had said earlier
that the 440-billion-euro ($590 billion) European Financial Stability Facility,
the cornerstone of a second Greek bailout, should be given "greater
strength."
But hours later, German Finance Minister Wolfgang Schaeuble
insisted there was no plan to boost the fund's warchest.
Schaeuble's comments come as lawmakers in Germany -- the
eurozone's most influential member -- are due to vote on whether to allow an
expansion of the scope and size of the European Financial Stability Facility.
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Source : AFP
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