Crude prices up in Asia

Updated at: 0729 PST, Thursday, July 21, 2011
SINGAPORE: Hopes of a resolution to the US debt impasse buoyed crude markets in Asia Thursday as traders awaited eurozone crisis talks aimed at preventing a Greek financial meltdown, analysts said.

New York's main contract, West Texas Intermediate (WTI) light, sweet crude for September delivery, rose 28 cents to $98.68 a barrel on its first trading day. Brent North Sea crude for delivery in September edged up nine cents to $118.24.

Traders were heartened by perceptions that the US was nearing a political resolution to slashing its budget deficit, said Sanjeev Gupta, Asia-Pacific chief oil and gas analyst for Ernst & Young in Singapore.

"The US benchmark, WTI, got some late-week support from emerging perceptions that a budget deal could be accomplished in time to stave off a debt crisis," he said.

US President Barack Obama had in recent days piled pressure on the Democratic and Republican parties to break a political impasse and compromise on a deal to rein in the nation's massive debt as the August 2 deadline loomed.

On Tuesday, Obama highlighted a new plan by a bipartisan "Gang of Six" senators that aims to slash the swollen US budget deficit by some $3.7 trillion over 10 years and boost revenues $1 trillion by closing tax loopholes and ending some tax breaks.

A day later, he said in a media interview that "my expectation is that we're going to get it solved," adding that he saw hopeful signs of compromise and that "over the next couple of weeks, hopefully we'll put this behind us."

Meanwhile, in Europe, leaders of eurozone countries were preparing for an emergency summit later Thursday to discuss ways of averting a default by debt-straddled Greece and preventing the crisis from spreading to Italy and Spain.

"European economic uncertainty is keeping Brent prices relatively range-bound," Gupta said. (AFP)