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Oil soars 9 pct as Europe moves to tackle crisis

Oil soars 9 pct as Europe moves to tackle crisis

Oil soared the most in more than three years after European leaders took surprisingly aggressive steps meant to halt a debt crisis that has undermined the regional economy.
Benchmark U.S. crude jumped by $7.27, or 9.4 percent, on Friday to end the week at $84.96 per barrel in New York. Brent crude, which helps set the price of imported oil, rose by $6.44, or 7 percent, to $95.51 per barrel in London.
Oil rose after eurozone leaders unveiled a plan to rescue ailing banks, relieve debt-burdened governments in Italy, Spain and elsewhere and restore the confidence of markets. The progress in dealing with Europe's lengthy debt crisis is good news for that continent's _ and the world's _ economy. Economic growth drives energy consumption.
The deal was struck as borrowing rates in Spain and Italy surged to levels that were considered unsustainable. The debt crisis has loomed over stock and energy markets for almost two months.
Investors were surprised and elated by the breakthrough. They rushed to buy riskier assets like oil and stocks. U.S. stock markets rose more than 2 percent, while European stocks posted even loftier gains.
"All of a sudden we're not worried about the Spanish and Italian banks going bankrupt over the weekend," said Phil Flynn, an oil analyst with Price Group.
Friday's percentage rise in benchmark U.S. crude was the biggest since March 12, 2009. The dollar gain was the largest since Sept. 22, 2008.
Oil added to its gains in the afternoon on reports that Norway's Statoil shut down production of another platform in the North Sea due to a tanker leak. Statoil previously said that daily production will fall 10 percent after oil workers went on strike at four North Sea fields.
North Sea oil supplies much of Europe. The loss of production will squeeze stockpiles just as Europe prepares to stop buying Iranian oil on Sunday. Europe announced the embargo earlier this year in an effort to pressure Iran to open its nuclear facilities to inspection. Western nations fear that Iran is building a nuclear weapon; Iran denies the claim.
International sanctions already have cut Iranian exports by about 700,000 barrels per day. Experts said it's unclear how much more of Iran's oil will be taken off the market once the embargo goes into effect. But a further reduction in global supply could increase prices for the remaining oil.
In other futures trading, heating oil added 14.41 cents, about 6 percent, to finish at $2.696 per gallon and wholesale gasoline added 11.3 cents, or nearly 5 percent, to end at $2.7272 per gallon. Natural gas rose by 10.2 cents, nearly 4 percent, to finish the week at $2.824 per 1,000 cubic feet.
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http://twitter.com/ChrisKahnAP


Updated : 2021-06-14 02:07 GMT+08:00