Oil prices surge in line with global stock markets

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World oil prices soared on Tuesday, mirroring the performance of world equity markets, as traders followed eurozone debt developments closely.

Brent North Sea crude for delivery in November jumped $2.91 to $106.85 a barrel in London late afternoon deals.

New York's main contract, West Texas Intermediate (WTI) for November, rallied $3.65 to $83.89.

"Oil prices have recovered quite a bit," said Commerzbank analyst Carsten Fritsch.

"The main reasons are a change of sentiment on financial markets, reflected in rising equity markets and a somewhat weaker US dollar.

"The downside risks for the economy and oil demand have not disappeared overnight, so a renewed price fall cannot be ruled out," he added.

Greek Prime Minister George Papandreou was to meet German Chancellor Angela Merkel for talks later Tuesday on containing a eurozone debt crisis which US President Barack Obama said is scaring the world.

Stock markets around the globe rallied sharply on hopes European leaders would finally get a grip on the long-running crisis threatening the euro project, even if analysts cautioned such euphoria could prove short-lived.

© 2011 AFP

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