13 October 2008 11:42 [Source: ICIS news]
LONDON (ICIS news)--Crude prices rose almost $4/bbl on Monday to take Brent crude on ICE Futures above $78/bbl after equity markets rallied as European governments announced rescue plans for the financial services industry.
By 09:45 GMT, November Brent crude had hit a high of $78.07/bbl, a gain of $3.98/bbl over the Friday close of $74.09/bbl, before easing back to around $77.60/bbl.
At the same time, November NYMEX crude was trading around $81.30/bbl, having hit a high of $81.80/bbl, a gain of $4.10/bbl over the previous close.
After the drop of more than $16/bbl last week on fears of a global recession, equity markets rallied on the back of reports that European governments were planning to rescue the financial industry by buying stakes in troubled banks.
The UK and the French governments were reported to be planning to spend £37bn ($63bn/€46bn) and €40 bn respectively.
During the past two weeks the oil markets’ main focus has been on the financial crisis and the impact a global recession could have on demand.
On Friday, crude fell around 10% on the day as prices were dragged down by a sell-off in stocks and commodities. Fears that a global recession will dry out credit triggered a round of length liquidation to cover margin calls.
Meanwhile, OPEC was reported to be planning to hold an emergency meeting in November to discuss the financial crisis and defend prices by perhaps trimming output.
($1 = €0.74/$1 = £0.58)
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