SINGAPORE – Europe’s weekend vow of a decisive resolution to its debt crisis and hopes that the US’ spending cuts plan will be passed without incident buoyed Asian oil markets Monday, analysts said.
New York’s main contract, light sweet crude for delivery in November, added 35 cents to $87.15 per barrel.
Brent North Sea crude for delivery in December gained 18 cents to $112.41.
“Oil is moving on the economic outlook and the overall strength in commodity markets,” said Ker Chung Yang, commodity analyst for Phillip Futures in Singapore.
“It’s responding to the better outlook for US economic growth and speculation that we may be near some sort of resolution to the eurozone crisis,” he told AFP.
The gloomy US economic climate lifted a tad on Sunday when key Republican leader Eric Cantor said a congressional supercommittee will reach agreement on $1.5 trillion in government spending cuts by a November 23 deadline.
If a deal is reached before then, the US can avoid triggering an automatic $1.2 trillion in cuts evenly distributed between military and non-military spending, which Pentagon officials warn would damage US security interests.
The discussions had taken place under the shadow of a repeat of political stonewalling by the Republicans who earlier in the year withdrew from talks with Democrats on lifting the US debt ceiling.
Meanwhile, European leaders on Saturday issued promises of swift and decisive action as soon as next weekend to beat back the region’s debt crisis, which is threatening to drag the world economy back into recession.
French finance minister Francois Baroin and his German counterpart Wolfgang Schaeuble issued strident statements of intent following a meeting of G20 finance ministers and central bankers in Paris.
“The results of the October 23 summit will be decisive,” Baroin said. “We are acting resolutely to maintain financial stability.”