Oil rebounds on European rescue efforts

09:05, May 11, 2010      

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Oil prices rebounded more than two percent on Monday as the approval of a global emergency package to back the euro boosted market sentiment.

Oil prices have been falling in the last four sessions as contagion fear of Greece sovereign debt crisis hurt market confidence.

During the past weekend, the European Union and the International Monetary Fund approved a 750 billion euro (nearly 1 trillion U.S. dollars) rescue plan for debt-strapped European countries.

In a separate show of support, the U.S. Federal Reserve reopened the dollar swap program with central banks in Canada and Europe to support credit markets. The European Central Bank also announced that it will buy government and private bonds to rescue the euro.

The rescue efforts greatly boosted oil market optimism about economic recovery in the Europe. Meanwhile, the euro rebounded from last week's 14-month lows against the dollar, which makes energy commodities that are priced in on dollars more attractive to investors.

Light, sweet crude for June delivery rose 1.69 dollars to settle at 76.80 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for June delivery rose 2.17 dollars to 80.44 dollars a barrel on the ICE Futures Exchange.



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