Oil nears $78 amid hopes of Europe financial fix

[October 05, 2011]  BANGKOK (AP) -- Oil rose to near $78 a barrel Wednesday in Asia amid hopes that Europe will contain the debt crisis that has engulfed Greece and threatens to destabilize other countries that use the euro.

Benchmark crude for November delivery was up $2.08 to $77.79 a barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $1.94 to close Tuesday at $75.67 a barrel in New York.

Oil prices have fallen from $100 in late July as the financial crisis swirled around Greece. The country, which is on the brink of bankruptcy, will not receive its next installment of a rescue loan without meeting strict austerity measures imposed by international lenders.

But sentiment recovered on Tuesday following reports that Europe was taking steps to bolster its banking sector, which is thought to be heavily exposed to Greek debt and could face crushing losses if the country defaults. Wall Street ended higher after a day of wild gains and losses. The Dow gained 1.4 percent, while the Standard and Poor's 500 rose 2.2 percent and the Nasdaq composite rose 3 percent.

"The rebound in stocks managed to pull the energy complex off the bottom from what had been a steep late-session sell-off," energy trader and consultant The Schork Group said in a report. "Which way the equities go today will determine much of where oil will go."

In London, Brent crude rose $1.88 to $101.67 per barrel on the ICE Futures Exchange. Brent lost $1.92 to finish at $99.79 per barrel on Tuesday, the first time it ended lower than $100 since February.

In other energy trading, heating oil rose 4 cents to $2.76 per gallon and gasoline futures fell 3 cents to $2.51 per gallon. Natural gas rose 2 cents to $3.66 per 1,000 cubic feet.

[Associated Press; By PAMELA SAMPSON]

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