Oil prices higher in Asian trade
SINGAPORE—Oil prices were higher in Asian trade Wednesday but sentiment was subdued after the meeting of French and German leaders failed to ease market concerns over the eurozone debt crisis.
New York’s main contract, West Texas Intermediate light sweet crude for September delivery, was up 17 cents to $86.82 a barrel, while Brent North Sea crude for October rose 10 cents to $109.23.
Analysts said concerns over the eurozone debt crisis remained a dampener among investors even after the meeting on Tuesday between French President Nicolas Sarkozy and German Chancellor Angela Merkel in Paris.
“The meeting between French and German leaders failed to ease concerns over the eurozone debt crisis,” said Ker Chung Yang, an analyst with Phillip Futures in Singapore.
After their meeting, the pair vowed to give the eurozone bloc a “true economic government” but experts said their pledges were not enough to defuse the debt crisis.
The two leaders said they would propose an EU-wide tax on financial transactions and seek to create a eurozone governing body headed by European Union president Herman van Rompuy.
But the pair disappointed many by not backing the idea of issuing “eurobonds” to pool the debts of the 17 eurozone members and by insisting that the bloc’s existing 440-billion-euro bail-out fund was “sufficient”.
Instead, the leaders said member states would be held to a tougher fiscal standard and new cross-border controls be put in place.
“The conclusion didn’t live up to market expectations,” Ker said.
“The Franco-German meeting has not produced anything new or useful,” said Sony Kapoor of the economic policy think tank Re-Define. “If this is all they had to say, what was the point of having this meeting?
“I fail to see how a balanced budget amendment… or even a financial transaction tax will tackle the euro crisis, help stimulate growth or even strengthen the weak EU banking system,” he said.