Oil prices linger near US$90 on elevated expectations on Europe

06-Aug-12

Oil price is lingering near US$90 a barrel holding onto most of the previous week's gains, on raised hopes that the European Central Bank would act to prevent Spain's financial woes from deepening. By early afternoon in Europe, benchmark crude for September delivery dipped by US$89.9 on the Nymex, while in London, Brent crude settled at US$105.8. Last week, European Central Bank chief Mario Draghi vowed to do whatever it takes to keep the euro common currency intact. Similar remarks from the leaders of France and Germany have created a support for the beleaguered euro, which was facing a new challenge to its existence as a surge in Spain's borrowing costs raised the prospect that one of Europe's biggest economies could ask for a bailout. China is also stepping up efforts to counter its economic slowdown, allowing cities to announce big infrastructure spending plans that would boost construction and also have the side effect of increasing demand for oil and other fuels.