Markets opened on a buoyant note on two new developments over the weekend- Europe's promise of a decisive resolution to its debt crisis as well as on hopes that USA’s spending cuts plan will be passed. New York's main contract, light sweet crude for delivery in November inched up to US$87.1, while Brent North Sea crude for delivery in December rose to US$112.4.
Republican leader Eric Cantor said a congressional supercommittee will reach agreement on US$1.5 trillion in government spending cuts by a November 23 deadline in USA. If a deal is reached before then, the US can avoid triggering an automatic US$1.2 trillion in cuts evenly distributed between military and non-military spending, which Pentagon officials warn would damage US security interests.
Oil ended the previous week near US$87 on encouraging economic news from USA and China. China reported a drop in its inflation rate last month, giving Chinese leaders more room to further stimulate the economy without overheating. Data from US indicated that consumers spent more on cars, clothing and furniture in September.