Crude up in Asia after France-Germany agreement

10th October 2011, Comments 0 comments

Crude prices were up in Asia Monday as traders took heart from France and Germany's announcement that they had agreed a plan to shore up Europe's banks, analysts said.

New York's main contract, light sweet crude for delivery in November, added 93 cents to $83.91 a barrel.

Brent North Sea crude for November delivery gained 53 cents to $106.41.

Vows to support Europe's debt-laden lenders made by the region's two most influential members reassured crude traders, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.

"German chancellor Angela Merkel and French president (Nicolas) Sarkozy indicated on Sunday that they would come up with a plan to recapitalise the European banks, ensuring they have the necessary capital, by the end of the month," Shum told AFP.

"Though no specific details were given, the market sentiment became more optimistic because of the news," he added.

Sarkozy promised on Sunday after talks with Merkel in Berlin of "lasting, global and quick responses before the end of the month" to combat the eurozone's debt crisis.

The French leader's announcement -- which was lacking in concrete details -- placed a time frame on the latest European attempt to try to solve a problem that has plagued the region for more than a year and depressed global economies.

Shum added that crude prices were also lifted by data from the US last Friday showing an unexpected hike in non-farm jobs.

The US Labor Department said the economy of the world's largest oil consumer created 103,000 jobs in September, far higher than economist predictions of a 60,000 jump.

The Labor Department also revised up the previous two months' figures. July payrolls totalled 127,000, not the 85,000 initially estimated, while August was revised from zero to 57,000.

© 2011 AFP

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