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Oil soars as Europe moves to bolster banks; ends at $84.96

On the New York Mercantile Exchange crude jumped by $7.27, or 9.4 percent, to end at $84.96 per barrel.

The Associated Press

6/29/2012

NEW YORK — A surprisingly aggressive debt deal in Europe sent oil prices soaring Friday to the biggest one-day gain since 2009.

Here's a breakdown of how energy prices traded:

On the New York Mercantile Exchange crude jumped by $7.27, or 9.4 percent, to end at $84.96 per barrel.

Gasoline added 11.3 cents, or nearly 5 percent, to end at $2.7272 per gallon.

Heating oil added 14.41 cents, about 6 percent, to finish at $2.696 per gallon while

natural gas rose by 10.2 cents, nearly 4 percent, to finish the week at $2.824 per 1,000 cubic feet.

On the ICE futures exchange Brent crude: rose by $6.44, or 7 percent, to $95.51 per barrel.

Financial markets around the world stormed higher Friday after European leaders came up with a breakthrough plan to rescue banks, relieve debt-burdened governments and restore investor confidence.

The Dow Jones industrial average climbed 265 points, one of its biggest gains this year, and stocks advanced even further in Europe, in strong and weak countries alike.

The price of oil posted the biggest one-day increase in more than three years, and other commodities shot higher — signs of hope that a deal in Europe might remove a big barrier to a healthier world economy.

In Brussels, leaders of the 17 countries that use the euro appeared finally to have found a broad strategy to fight a debt crisis that has hounded European governments and world investors for three years.

The leaders agreed to pump money directly into stricken banks, let some countries tap into rescue money without submitting to stringent budget requirements and, later, tie European governments closer in economic union.

David Kelly, chief global strategist at JPMorgan Funds, said it was becoming clear that European leaders will compromise to solve the crisis. One of the biggest stock gains Friday came in Germany, which took a hard line in earlier negotiations.

"The whole language is positive here," he said. "Every time they've stared over the cliff into the abyss of a euro breakup, they've realized it's much wiser to get closer together."

There was a sign immediately that Europe's latest plan was working: The cost for the troubled government of Spain to borrow money on the bond market fell dramatically, by more than half a percentage point, to 6.34 percent.

Previous market rallies tied to progress in Europe have proved temporary. But for the day, at least, global stock markets were jubilant:

— In New York, the Dow Jones industrial average climbed as much as 251 points, its second-best showing this year, and the Standard & Poor's 500 index soared more than 2 percent. The rally left the S&P with a gain of almost 8 percent at the halfway mark for the year.

— The benchmark stock index in Germany rose 4.3 percent, by far its best performance this year. Germany has the healthiest economy in Europe, and a warm reaction there was a crucial sign of approval for the plan.

— Stocks hit their highest level in two months in Italy and Spain, two of the countries with the shakiest finances. Stocks also neared a two-month high in Greece, another epicenter of the debt crisis.

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Traders of other risky investments also rejoiced. They sold U.S. Treasurys, sending the yield on the 10-year Treasury note up to 1.63 percent from 1.57 percent late Thursday, as demand decreased for ultra-safe investments.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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