Oil jumps on bargain-hunting

19th July 2011, Comments 0 comments

World oil prices rallied on Tuesday as traders snapped up cheap crude after European and US debt strains pushed the market down on Monday, analysts said.

New York's main contract, light sweet crude for delivery in August, rose $1.78 to $97.71 a barrel.

Brent North Sea crude for September delivery added $1.14 to $117.19.

"I think today is just pretty much a relief rally on the back of heavily sold oil prices yesterday," said Serene Lim, an oil and gas analyst for ANZ bank.

Prices slumped on Monday -- with New York crude falling 1.35 percent -- as traders fretted over the US and European debt crises as officials try to agree a second bailout for Greece.

Eurozone leaders were preparing for an emergency summit on Thursday to explore methods of preventing a Greek default, which could have destabilising effects on larger European economies.

In the United States, the world's biggest oil consumer, senators were struggling to bridge a deep partisan divide and forge a compromise deal to raise the federal government's debt ceiling by August 2 to avert a potentially disastrous default.

In the absence of significant developments on both sides of the Atlantic, traders were "still very much uncertain about the market," Lim said.


© 2011 AFP

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