Boosted by EU's rescue package for Ireland oil zooms to $84
29 Nov 2010
Oil prices pushed past $84 today following the EU approving a rescue for Ireland and outlining a permanent system to resolve the euro zone's debt crisis, offering some good reasons to expect energy demand growth to remain resilient next year.
US crude for January was up 0.8 per cent to $84.46 a barrel, nearing the peak of $84.53 it touched on Friday, the highest intra-day price since 16 November. Prices reached a two-year high of $88.63 on 11 November.
ICE Brent for January was up 57 cents at $86.15, re entering positive territory as the dollar shed gains.
Finance ministers from the 16-nation euro zone, keen on preventing the contagion spreading to Portugal and Spain, unanimously endorsed an emergency €85-billion loan package to help the stricken country cover bad bank debts and bridge a huge budget deficit. (See: Ireland succumbs to EU, IMF on €85-bn bailout)
However, some market participants are not quite so sure the package for Ireland would help put an end to Europe's credit problems, given the ongoing Greek crisis which first saw an enthusiastic market sentiment to a bailout that failed to sustain.
According to analyst rising prices were only a relief rally, but there still remain so many structural weak spots that people are already targeting other domino economies like Portugal and Spain.
