World oil prices raise on bargain-hunting

AFP, Tuesday 19 Jul 2011

Prices climb early on Tuesday as traders snap up cheap crude after European and US debt strains pulled prices down on Monday

World oil prices climbed on Tuesday as traders snapped up cheap crude after European and US debt strains had pulled prices down on Monday, analysts said.

New York's main contract, light sweet crude for delivery in August, firmed 77 cents to US$96.70 a barrel. Brent North Sea crude for September delivery added 85 cents to $116.90 per barrel in morning London deals. "I think today is just pretty much a relief rally on the back of heavily sold oil prices yesterday," said Serene Lim, an oil and gas analyst for ANZ bank in Singapore.

Prices had slumped on Monday -- with New York crude falling 1.35 per cent -- as traders fretted over the US impasse and

European sovereign debt as officials try to agree a second bailout for Greece. Eurozone leaders were preparing for an emergency summit on

Thursday to explore methods of preventing a Greek default, which could have destabilising effects on larger European economies. And in the US senators were struggling to bridge a deep partisan divide and forge a compromise deal to raise the federal government's debt ceiling by 2 August in order to avert a potentially disastrous default there.

In the absence of significant developments on both sides of the Atlantic, crude traders were "still very much uncertain about the market", ANZ bank's Lim said.

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