Oil prices rocket on EU summit deal

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Oil prices rocket on EU summit deal

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Oil prices rocketed as buyers seized on eurozone leaders' agreement on key crisis measures.

30 June,2012 06:52 am

US oil prices rocketed more than $7.00 a barrel Friday as buyers seized on the eurozone leaders agreement on key crisis measures as a signal that demand could rise.New Yorks main contract, West Texas Intermediate for August delivery, finished up $7.27 at $84.96 a barrel.In London trade Brent North Sea crude for August surged $6.44 to $97.80 a barrel.The burst of buying came after a summit in which the key leaders of the eurozone bridged differences to agree substantial new measures to support banks and help troubled governments cut their borrowing costs, and to sign off on a 120 billion euro ($150 billion) economic stimulus program.The euro surged more than two cents on the dollar, another source of upward pressure on dollar-denominated oil prices.The optimistic news from the EU summit spread bullish signs across the oil market as crude oil prices rebounded strongly from recent losses, said Sucden Financial Research analyst Myrto Sokou.Prices were up primarily because of the summit and this positive news that came out, said Justin Harper, market strategist for IG Markets Singapore.Because the expectations were so low to start with, people really werent expecting anything to come out of it and weve got some positive development, obviously a lot of money, $150 billion.Harper remained dubious of the sustainability of the price jump.I think its a short term rally, it could fizzle out because people have seen that theres still a lot of infighting between all the different member states, he said.Theyre attacking the short-term issues... theres still a lot of issues to be resolved so sadly I think (the rally) cant be sustained.