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Oil Market Reacting Positively to Cyprus Bailout Deal

Oil prices rose on Monday as market showed improved sentiments after Cyprus reached a deal, averting a deeper European crisis and boosting the oil demand in the troubled region.  The European Union, European Central Bank and International Monetary fund struck a last minute deal with Cyprus in the early hours of Monday that qualifies the islands for a much needed rescue package to help it service its debt.

Cyprus not suffering an uncontrolled bankruptcy and have to leave the Eurozone may encouraged investors to increase their long positions in crude oil.

The euro rose against dollar on the news, making oil and other commodities denominated in the US currency more attractive.

Bent crude gained 58 cents to $108.24 a barrel. US oil increased 41 cents to $94.12.

Now investors would be looking to durable goods and confidence data from US on Tuesday and China’s official purchasing manager’s index next Monday for clues on the outlook  for demand in the world’s top two oil consumers.   

Source : Economic Times