Oil prices rebounded above $77 today from their lowest in almost three months after the European Union agreed to protect the bloc's debt-stricken nations, boosting confidence energy demand will continue to recover.
Ministers agreed to set up a €500-billion emergency fund in the early hours of today, after the IMF unanimously approved a €30 billion rescue loan for debt-stricken Greece a day earlier to stem a crisis that threatens other euro zone members.
US crude for June delivery was up $2.06 at $77.17 a barrel. ICE Brent crude for June climbed $1.92 to $80.19.
Crude prices fell more than $11 or about 13 per cent last week, the biggest weekly loss in almost a year and a half, on worries the euro zone's debt crisis would derail the global economic recovery. Prices touched $87.15 a week ago, their highest in almost 19 months, before ending the week at their lowest since mid-February.
Opec's secretary-general said yesterday global oil markets were oversupplied, but it was too early to talk about the producer group taking action to halt the sharp price fall sparked by the euro zone debt crisis.
The dollar fell more than 1 per cent against a basket of currencies today. A weaker dollar makes oil imports cheaper for emerging economies, which account for most of the growth in demand forecast for this year.
The latest EU deal is a mix of loans and loan guarantees totalling €440 billion, and €60 billion through a European instrument to be covered with EU guarantees.
The emergency package will involve the IMF, with officials saying its contribution could be about €220 billion.
Price charts show US crude temporarily supported at $74.51 and expected to rebound to $78 as the drop last week was too sharp not to be followed by a good rebound.
News of the EU emergency fund also lifted Asian stocks, sending Japan's Nikkei average 1.6 per cent higher today.
Saudi Arabia, the world's top crude oil exporter, will maintain full volumes to main Asian customers next month, suggesting it is content with current oil prices.
China's main ports received 18.46 million tonnes of crude oil in the first 29 days of April, up 26.6 per cent on the year, the transportation ministry said on its website.
The increase signalled the world's second-largest crude buyer's total inbound shipments could have topped 20 million tonnes last month as imports via several land entrances were not included in the statistics.
Reuters