Oil prices stay firm; eyes on Irish bailout loan, China

LONDON, Reuters

Oil rose above US$82 a barrel on Friday on a stronger euro ahead of an expected bailout of Ireland as well as on expectations China could lift interest rates to curb inflation. U.S. crude for December delivery, which expires after Friday’s settlement, rose 55 cents to US$82.40 a barrel by 0955 GMT. North Sea benchmark ICE Brent crude futures led the market higher to trade 89 cents up at US$85.94 a barrel, having earlier risen US$1.10 to US$86.15 a barrel on hopes debt-ridden Ireland will obtain a bailout loan from the European Union and the IMF to shore up its banks. Oil could drop back to US$80.06 per barrel as its rebound could have fizzled, Reuters technical analyst Wang Tao said on Friday. “The announcement of some type of financial assistance for Ireland seems imminent,” Gain Capital Forex.com senior strategist Daniel Hwang said in a note.

Analysts said that further expected clarity about Ireland’s debt woes has spurred risk appetite among investors, which has supported oil prices. The euro edged up versus the dollar. VTB Capital oil analyst Andrey Krychenkov said that while risk aversion has receded, investors remain concerned about Spain and Portugal.

The market awaits comments from U.S. Federal Reserve Chairman Ben Bernanke at 1015 GMT, ahead of a European Central Bank conference. Investors were also eyeing a potential Chinese interest rate increase this weekend after a report in a Chinese newspaper suggested that Friday could be a convenient time to raise rates before banks settle accumulated interest on the 20th day of the month.