Oil gains on euro zone bailout, Libya killing

Wed Sep 12, 2012 8:38am EDT
 
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By Simon Falush

LONDON (Reuters) - Brent crude oil rose on Wednesday, lifted by a German court decision backing a euro zone bailout fund, hopes the Federal Reserve will ease monetary policy and on growing geopolitical risk after militants killed the U.S. ambassador to Libya.

Brent crude for October delivery, which expires on Thursday, rose for a fifth straight session, gaining 55 cents to reach $115.95 a barrel by 8:10 a.m. EDT (1210 GMT). It earlier hit $116.67, its highest point since Aug 16.

U.S. crude for October delivery rose 53 cents to $97.70 a barrel.

Germany's Constitutional Court said on Wednesday the country could ratify the euro zone's new rescue fund and budget pact as long as it could guarantee there would be no increase in German financial exposure to the bailout fund without parliament's approval.

"I think it should be seen as a positive step in the long road to solving the euro zone debt crisis. I think markets will be relatively pleased with the announcement, and the conditions put in place," said Henk Potts, market analyst at Barclays Wealth.

A two-day U.S. Federal Reserve policy meeting starts on Wednesday. Markets widely expect some type of new monetary stimulus to boost the U.S. economy, helping to brighten a gloomy demand outlook.

LIBYA KILLING

Geopolitical risk, which has been supporting oil since tension between Iran and Israel escalated earlier this year, came back into focus on news the U.S. ambassador to Libya and three other embassy staff had been killed by militants in a rocket attack.   Continued...

 
Gas pumps are seen at a petrol station in Prague May 10, 2012. REUTERS/David W Cerny