Oil higher as G7 talks calm worries

Singapore – Oil was higher in Asian trade Wednesday after G7 European leaders vowed to respond “speedily” to the continent’s debt crisis.

A decline in US crude reserves also lent support to prices, analysts said.

New York’s main contract, West Texas Intermediate (WTI) crude for delivery in July, was up 49 cents to $84.78 per barrel while Brent North Sea crude for July gained 42 cents to $99.26 in morning trade.

“There has been some correction in oil prices after the G7 talks with some respite in the gloom over the eurozone debt crisis, and also a drop in US stockpiles has uplifted the market,” said Justin Harper, market strategist at IG Markets Singapore.

European finance ministers from the Group of Seven economies had vowed after emergency talks on Tuesday to respond “speedily” to the continent’s fiscal crisis, Japan’s Finance Minister said.

“We were able to share our recognition on the European issue,” Jun Azumi was quoted by Jiji Press as saying after a conference call with his G7 counterparts. “The European side stated that they will respond to it speedily.”

Worries over the eurozone debt crisis, along with the anaemic US economy, have cast a shadow over oil prices in recent months as investors worry demand will eventually slacken.

Meanwhile, a rise in US crude stocks has provided a brief respite for investors still fretting about demand in the world’s top oil consuming nation.

Data from the American Petroleum Institute (API), an industry body, showed nationwide crude stocks fell by 1.8 million barrels in the past week.

The API figures are usually released ahead of the US Department of Energy’s weekly Wednesday report on crude stockpiles and inventory on other oil-related products.