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Oil rose for a second day in New York, reversing earlier losses as European leaders pressured Greece into proceeding with a rescue package that may stem the region’s debt crisis.
West Texas Intermediate futures rebounded from a 1.8 percent decline before a Group of 20 summit set to begin today in Cannes, France. Led by Germany and France, Europe’s economic and political anchors, the euro’s guardians yesterday cut off financial aid for Greece until an early December vote determines whether it deserves a fresh batch of loans.
European leaders raised the prospect of the euro area splintering, forcing Greece to decide whether it’s in or out when it holds a referendum on a bailout package next month.
On Thursday, the focus of market participants were meeting the European Central Bank, which was the first for the new ECB president Mario Draghi, who succeeded on 1 November, this post by Jean-Claude Trichet. At the end of this session the European Central Bank unexpectedly lowered the discount rate by 25 basis points to 1.25% level, which put pressure on the euro.
The main attention is focused on investors awaiting the outcome of negotiations, the G20 leaders in Cannes. Summit of the "Big Twenty" opens today at the French Cannes. The leaders of the "twenty" is expected to discuss the global economy, reforming the global financial system and regulation of financial markets, as well as the problems of volatility in commodity prices. The focus of the G20 will also be providing employment, enhancing social protection and anti-corruption, energy issues and climate change.
Crude for December delivery rose to $94.23 a barrel on the New York Mercantile Exchange. It earlier fell as low as $90.87 a barrel.
Brent for December settlement traded 34 cents higher at $109.68 a barrel on the London-based ICE Futures Europe exchange. Brent’s premium to New York crude was $16.61 a barrel, compared with settlements of $16.83 yesterday and a record-high $27.88 on Oct. 14.
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