Oil above $80 on hopes of Europe action on banks

[October 06, 2011]  BANGKOK (AP) -- Oil rose above $80 a barrel Thursday in Asia, continuing a rebound from 12-month lows on signs that European finance officials are moving to bolster the region's banks.

Benchmark crude was up 49 cents to $80.17 a barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract jumped $4.01, or 5.3 percent, to finish at $79.68 per barrel in New York on Wednesday.

Brent crude was up 63 cents to $103.38 on the ICE Futures Exchange in London.

Earlier in the week, oil dropped to the lowest level since September 2010 as Europe's financial crisis dragged on.

Experts are concerned that if heavily indebted Greece fails to pay its bills, it will spark a financial meltdown similar to the U.S. banking crisis of 2008.

But those fears eased after reports that the International Monetary Fund was pressing European leaders to quickly reinforce banks against worsening market panic.

Sentiment was further boosted after German Chancellor Angela Merkel said she would support a Europe-wide plan to recapitalize banks if it was deemed necessary.

In other energy trading, heating oil was up 1.1 cents at $2.787 a gallon and gasoline futures rose 2.7 cents to $2.60 per gallon. Natural gas lost 2.9 cents to $3.54 per 1,000 cubic feet.

[Associated Press; By PAMELA SAMPSON]

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