With the confidence of European Union’s unexpected agreement about Italy and Span debt, world oil price soared Friday.
In New York, benchmark U.S. crude rose to $82.18 per barrel, jumped by $4.49, or 5.8 percent on Friday. London Brent crude rose to $95.51 per barrel, up 4.15, or 4.5 percent the same day. However, both New York and London benchmarks are facing their steepest quarterly fall since the financial crisis in 2008.
"I think the expectation was it would take the EU most of the weekend to reach an agreement,” said Thorbjoern Bak Jensen, oil analyst at Global Risk Management, Reuters reported. “So I think this has taken the market a bit by surprise."
The eurozone leaders had made an agreement to pour bailout money directly into banks and cut down the borrowing costs of stricken members like Italy and Span. This move shows that the bloc is implementing a more elastic loom to solve its two-year-old debt crisis.
The market shows a positive reflection towards this rally of Eurozone countries today. However, the weak fundamentals of global oil market still haven’t been solved. Even through overall global oil demand is expected to grow this year, the pace is predicted as the most sluggish since 2008, according to a Reuters poll Friday.
In Norway, the industrial action in the petroleum sector has cut by 18 percent oil production. And because of the suspect of nuclear weapon test, international sanctions have cut Iranian oil exports by about 700,000 barrels per day, and Europeans union also prepared to stop import oil from Iranian from Sunday. But also these moves still didn’t change the oil surplus situation.
"The market now is oversupplied, and if the surplus continues much longer, OPEC will need to revise oil production levels," said Iraq’s Deputy Prime Minister on Friday.
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