Oil prices rally above $110 in London

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Oil prices rallied Thursday, mirroring strong gains on equity markets, as the G20 got down to business on the eurozone debt crisis and the European Central Bank cut interest rates in a surprise move.

New York's main contract, light sweet crude for delivery in December, jumped $1.95 to $94.46 a barrel.

Brent North Sea crude for December delivery climbed $1.57 to $110.91 in late London trading.

"Given persistent macro(economic) fears and concerns for potential sovereign defaults in the (eurozone) monetary union, crude prices continue to swing back and forth," said Andrey Kryuchenkov, commodities analyst at VTB Capital.

Oil prices closed mixed on Wednesday, with investors left disappointed by a lack of new US Federal Reserve stimulus measures and worried by the Greek debt crisis.

On Thursday, markets were tracking a Group of 20 summit in the French resort of Cannes, where the leaders of the world's most powerful economies were attempting to strong-arm Greece into abiding by the terms of its latest rescue deal.

Elsewhere, the European Central Bank's new chief Mario Draghi surprised financial markets with a rate cut at his first policy meeting, helping to calm investors panicked by the eurozone debt crisis.

The ECB's 23-member governing council voted unanimously to lower the rate for its main refinancing operations by a quarter of a percentage point to 1.25 percent.

© 2011 AFP

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