Oil prices rise as EU closes in on new treaty

in New York. Brent crOil prices rose for the first time in three days, as the European Union moved closer to a plan that promises to fix the eurozone debt crisis. Benchmark crude rose US$1.07 yesterday to end the week at US$99.41 per barrel ude, which is used to price foreign oil imported by some US refineries, added 53 cents to finish at US$108.47 in London. Massive debts in several European nations have rattled investors for months. Experts say the eurozone is headed back into recession, and a drop in energy demand and consumer spending is inevitable given the series of government spending cuts under way in numerous eurozone nations.

It’s still unclear how bad the economy will get in Europe and whether leaders can halt spiraling debts that threaten the banking system. Oil prices and stock markets have wavered most of the week as perceptions shifted about the proposed financial reforms within the eurozone. After falling Wednesday and Thursday, oil prices turned higher as the European Union closed in on a new treaty that would further integrate their finances in an attempt to save the euro. Almost all of the 27 countries in the EU, with the exception of the UK, support a more intimate financial relationship that would allow more central control and require balanced budgets.

Major US stock indexes rose between one and two per cent in afternoon trading. Natural gas prices dropped by four per cent as some parts of the country continued to see above-average temperatures. Natural gas prices fell by 14 cents to end at US$3.3170 per 1,000 cubic feet in New York. In other energy trading, heating oil fell by 1.73 cents to end at US$2.9125 per gallon. Gasoline futures rose by 2.95 cents to finish at US$2.5961 per gallon.