Related Keywords: Energy
--Europe's plan to help banks boosts oil, equities
--Crude-oil futures jump by more than 5%
--Traders cheer progress on debt crisis solution, but some still cautious
By Jerry A. DiColo
NEW YORK--U.S. crude futures rose more than 5% Friday as investors cheered a plan to help the euro zone's struggling banks.
Light, sweet crude for August delivery recently traded $4.17, or 5.4%, higher at $81.86 a barrel on the New York Mercantile Exchange, after rising above $82 earlier in the session.
Brent crude on the ICE futures exchange traded $4.04 higher at $95.40 a barrel.
European leaders attending a two-day summit agreed early Friday on a plan to use bailout funds to directly aid banks in Spain and Italy.
The move, along with plans to bring Europe closer together, led to a surge in the euro, equities and commodities markets. The euro recently traded at $1.2684, up 1.9% from $1.2444 on Thursday. The Dow Jones Industrial Average recently traded 1.5% higher at 12,789.
"We got the good news from the EU and equities took off," said Rich Ilczyszyn a broker at iiTrader in Chicago. "That's what's driving us higher."
He added that oil futures broke through a technical barrier above $81 that could result in a rally back to the $90 level.
Crude-oil traders have focused on Europe in recent weeks, concerned that a deepening financial crisis in the region will smash any hopes for the global economy and reduce demand for oil and other fuels.
After rising above $105 a barrel in early May, Nymex oil futures tumbled by 27% to settle at an eight-month low of $77.69 a barrel on Thursday.
Analysts also say the current market is well supplied with crude due to high production levels in the U.S. and Saudi Arabia, but a recovery in demand on improving sentiment in Europe could result in a rebound in prices.
Still, some market watchers are skeptical about the EU plans, concerned that the spreading crisis will require further bailout funds that Germany may be unwilling to provide.
"The markets are starting to change their view that the summit may in fact end with some degree of progress," said Dominick Chirichella, an analyst at the Energy Management Institute. "Whether or not this new found market enthusiasm will last through all of Friday's trading sessions is still a bit of an unknown."
Front-month July reformulated gasoline blendstock, or RBOB, recently traded 6.83 cents, or 2.6%, higher at $2.6825 a gallon. July heating oil recently traded 9.69 cents higher at $2.6488 a gallon.
Write to Jerry A. DiColo at email@example.com.
(END) Dow Jones Newswires
June 29, 2012 09:46 ET (13:46 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.
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