London - Arabstoday
Oil rose a dollar to around $109 a barrel yesterday after European officials unveiled plans to tackle the Eurozone debt crisis through bond buying, whilst tight supply continued to underpin. Brent crude futures were up 82 cents to $109.21 a barrel at 10.12am GMT. They had hit an intraday high of $109.64 immediately after a document was issued explaining how the European rescue fund will be able to buy bonds on the secondary market. The euro also rallied and European shares trimmed losses as fears that Germany and France would be unable to agree a solution eased. US crude oil futures, which expired yesterday, was up 39 cents at $86.50 a barrel. \"There are a lot of ‘ifs and buts\' in this document but at least they are coming to some sort of consensus,\" said a trader. \"The euro has jumped up and oil has gone up with it.\" Uncertainty about a viable resolution for the Eurozone debt crisis has stalked the market ahead of a crucial EU summit this weekend. But oil has proved relatively resilient, with Brent underpinned by short supply due to production problems in the North Sea. \"A lot of the strength of the market is being driven by the fact that there are cargoes missing from the programme and we expect to see some missing from next month\'s as well,\" a trader said. \"The North Sea is going through a bit of an adjustment — UK investment has dropped off very substantially in the last few years. That will have an effect.\" In addition, backwardation in the curve — where the front contract trades at a premium to the next one — is discouraging traders from building inventories.