Sept. 26 (Bloomberg) -- Oil rose from a six-week low in New York as investors speculated European policy makers will step up measures to ease a sovereign debt crisis that has disrupted financial markets and slowed the economy, curbing fuel demand.
Futures increased as much as 1.3 percent, climbing for the first day in four. European policy makers were pressured at the annual meeting of the International Monetary Fund in Washington to boost their regional rescue fund. U.S. Treasury Secretary Timothy F. Geithner said that governments must unite with the European Central Bank to “create a firewall against further contagion” and defuse the “most serious risk now confronting the world economy.” Brent oil’s premium to U.S. prices narrowed for a second day.
“I think everyone now fully understands the implications of Greece defaulting,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “The key is whether or not the market believes that this sort of support will actually work.”
Crude for November delivery gained as much as $1 to $80.85 a barrel in electronic trading on the New York Mercantile Exchange and was at $80.50 at 10:16 a.m. in Sydney. The contract last week slid 9.2 percent to $79.85, the lowest settlement since Aug. 9. Prices are 5.2 percent higher the past year.
Brent oil for November settlement was at $104.58 a barrel, up 61 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was $24.08 higher than U.S. futures, compared with a record $26.87 on Sept. 6, based on November settlement prices.
Brent’s premium to New York oil narrowed amid signs that Libyan supplies will return. Harouge Oil Operations, a joint venture between Libya’s state-owned National Oil Corp. and PetroCanada, will begin pumping crude from the country’s Amal field in a “few weeks,” the company’s chairman Abdulwahab Elnaami said yesterday.
Fighting in Libya since February has reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell to 45,000 barrels a day last month, according to Bloomberg estimates, compared with the 1.6 million barrels a day the nation pumped in January.
Global crude supplies are adequate and demand has weakened because of the European financial crisis and general fears about the world economy, Qatari Oil Minister Mohammed Saleh al Sada said yesterday in Doha. Qatar is pleased that Libya is starting to produce and export oil, al Sada said.
The 17 euro area nations accounted for about 12 percent of global oil demand last year, according to Bloomberg calculations based on BP Plc’s annual Statistical Review of World Energy.
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