Oil rises on bargain-hunting

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World oil prices climbed on Tuesday as traders snapped up cheap crude after European and US debt strains had pulled prices down on Monday, analysts said.

New York's main contract, light sweet crude for delivery in August, firmed 77 cents to $96.70 a barrel.

Brent North Sea crude for September delivery added 85 cents to $116.90 per barrel in morning London deals.

"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 in Singapore.

Prices had slumped on Monday -- with New York crude falling 1.35 percent -- as traders fretted over the US impasse and European sovereign debt 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.

And in the US 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 in order to avert a potentially disastrous default there.

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


© 2011 AFP

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