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Oil soars in Asia after EU deal

Oil prices surged in Asia on Friday with traders lauding a $150-billion growth pact pushed through by the European Union after Italy and Spain lifted their opposition to it, analysts said.

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New York’s main contract, light sweet crude for delivery in August rose $1.66 to $79.35 a barrel and Brent North Sea crude for August delivery gained $1.28 cents to $92.64.

Crude markets were rejoicing after Spain and Italy withdrew their opposition to the deal which enabled it to be passed, said Justin Harper, market strategist for IG Markets Singapore.

Prices were up “primarily because of the summit and this positive news that came out,” he said.

“Because the expectations were so low to start with, people really weren’t expecting anything to come out of it and we’ve got some positive development, obviously a lot of money, $150 billion,” he added.

Earlier Italian and Spanish stonewalling had ignited fears that the two-day summit aimed at paving the way for deeper economic integration and ending the long-running crisis would be derailed.

But the two countries were mollified after more than 13 hours of intense talks, said Luxembourg Prime Minister Jean-Claude Juncker, head of the eurogroup finance ministers.

Eurozone leaders also agreed to use the bloc’s bailout fund to directly support struggling banks and bring down borrowing costs of troubled countries, opening the door to emergency aid for Rome and Madrid.

Despite the crude price rally, Harper said things were still looking grim in the eurozone.