Oil above $79 as eurozone leaders reach deal on Spanish banks

PanARMENIAN.Net - Oil jumped above $79 a barrel Friday, June 29 in Asia, bouncing off an eight-month low after European leaders agreed to use the continent's bailout fund to funnel money directly to struggling Spanish banks, AP reports.

Benchmark oil for August delivery was up $1.60 at $79.29 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.52 to settle at $77.69, the lowest close since October, in New York on Thursday.

In London, Brent crude for August delivery was up $1.30 at $92.66 per barrel on the ICE Futures exchange.

Policymakers said at an EU summit early Friday that they would create a unified bank supervisory board and allow a rescue fund to recapitalize Spain's banks without boosting government debt.

Before the summit, analysts hadn't expected any significant policy announcements, so investors reacted with optimism Friday that the EU may be taking steps toward solving its debt and economic woes.

Asian stock markets rose and the euro jumped to $1.2583 from $1.2429 late Thursday in New York. Oil traders often look to stock markets as a barometer of overall investor sentiment. A weaker U.S. dollar makes commodities traded in dollars such as crude less expensive for investors with other currencies.

Crude has plunged from $106 early last month amid expectations that weak global economic growth will reduce demand for oil.

In other energy trading, heating oil was up 3.2 cents at $2.58 per gallon and gasoline futures gained 2.0 cents at $2.50 per gallon. Natural gas added 3.6 cents at $2.76 per 1,000 cubic feet.