Crude up in Asia on hopes of robust eurozone action

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SINGAPORE: Rumours of eurozone nations boosting a bailout fund and taking bold steps to rescue debt-straddled nations lifted crude markets in Asian trade Tuesday, analysts said.

New York's main contract, light sweet crude for delivery in November, surged $1.15 to $81.39 per barrel.

Brent North Sea crude for November delivery rose 95 cents to $104.89.

Crude prices rallied as rumours persisted of eurozone nations considering radical and bold measures to prevent Greece and other debt-laden nations from defaulting on their debts, analysts said.

"(Oil prices) are rebounding from a six-week low on optimism that the European offices will help Greece to ease its debt burden and that of the eurozone debt crisis," said Ker Chung Yang, commodity analyst for Phillip Futures in Singapore.

Traders' hopes were raised over the weekend when the International Monetary Fund (IMF) announced that countries of the eurozone were considering expanding their bailout fund to combat the region's debt crisis.

On Thursday, the parliament of Germany -- the eurozone's most influential member -- is due to vote on whether to allow an expansion of the scope and size of the European Financial Stability Facility.

Speculation of a eurozone banking recapitalisation as well as an orderly Greek debt default was also keeping crude prices up, analysts said.

"Weekend press reports... suggest that EU policymakers are looking at a three-pronged plan which involves leveraging the firepower of the EU's rescue fund up to 3.0 trillion euros, a recapitalisation of vulnerable eurozone banks and an orderly Greek debt default," said VTB Capital economist Neil MacKinnon. (AFP)