Crude up in Asia after Greek austerity deal

SINGAPORE – Crude prices rose in Asia Monday as markets cheered Greece’s approval of harsh austerity measures demanded by international creditors in return for a second bailout package, analysts said.

New York’s main contract, light sweet crude for delivery in March, was up 84 cents to $99.51 a barrel in afternoon trade. Brent North Sea crude for March delivery added 95 cents to $118.26.

Oil traders breathed a sigh of relief after Greek lawmakers Sunday pushed through a new round of drastic austerity measures despite massive public protests that left dozens injured and buildings ablaze, analysts said.

“I think this is the key reason that sentiment has turned positive over the weekend,” said Ker Chung Yang, commodity analyst for Phillip Futures in Singapore.

Greek Finance Minister Evangelos Venizelos told parliament it had to back the plan to unlock a 130 billion euro ($171 billion) rescue fund from the EU and the International Monetary Fund, or Greece would be forced to default.

The vote, while a key hurdle, will not in itself release the funds. Eurozone finance ministers are set to meet Wednesday in Brussels to discuss the next steps.

Justin Harper, head of research at IG Markets Singapore, said there are still risks ahead.

“Greece will see its economy shrink as a result of these cutbacks. The danger is that with so many continental neighbours in the same boat, Europe will tip into recession which is bad news for the global economy,” he said.