Oil above $96 as traders eye Italy debt woes

[November 10, 2011]  SINGAPORE (AP) -- Oil prices rose slightly to above $96 a barrel Thursday in Asia as investors mulled the impact of Europe's debt crisis on the continent's economic growth and crude demand.

Benchmark crude for December delivery was up 63 cents at $96.36 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.06 to settle at $95.74 in New York on Wednesday.

Brent crude was up 56 cents at $112.86 a barrel on the ICE Futures Exchange in London.

Italian Prime Minister Silvio Berlusconi said Tuesday he would step down after Parliament passes a series of economic reforms to stave off financial ruin in Italy. But there was growing fear he doesn't have the will or the clout to push the measures through, while some suspect he may try to stay in power.

The political uncertainty in Italy sparked a global sell-off of financial assets Wednesday. The Dow Jones industrial average plunged more than 3 percent, the euro slipped 2 percent against the dollar, and Italy's key borrowing rate spiked to 7.4 percent.

Crude tends to fall when the dollar gains because commodities such as oil become more expensive for investors with other currencies.

"With Greek and Italian debt problems still largely unresolved and with fears of contagion still prevalent, further euro weakening would appear likely," energy consultant Ritterbusch and Associates said in a report.

In other Nymex trading, heating oil added 2 cents at $3.12 per gallon and gasoline futures rose 0.1 cent to $2.65 per gallon. Natural gas gained 0.2 cent at $3.65 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

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