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Oil hovers below $101 ahead of EU debt summit

Oil prices hovered below $101 a barrel today in Asia ahead of an interest rate decision in Europe and a crucial summit on the continent's debt crisis.

business Updated: Dec 08, 2011 11:32 IST

Oil prices hovered below $101 a barrel on Thursday in Asia ahead of an interest rate decision in Europe and a crucial summit on the continent's debt crisis.

Benchmark crude for January delivery was up 12 cents to $100.61 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract dropped 79 cents to settle at $100.49 on Wednesday.

In London, Brent crude was down 12 cents at $109.41 on the ICE futures exchange.

European leaders will meet later Thursday to discuss possible spending targets and ways to enforce them in a bid to lower the debt levels of countries such as Greece and Italy and restore investor confidence. Some analysts expect the European Central Bank to lower interest rates to help spur lending and economic growth.

"The direction of oil appears to hang in the wind as the world awaits (an announcement) from the ECB," energy consultant and trader The Schork Group said in a report. It held out little hope the two day summit would produce a lasting solution to the debt crisis.

Crude has bounced around $100 for the last three weeks as traders mull whether weak but improving U.S. economic growth justifies further gains. Oil has jumped from $75 in October.

Investors will also closely watch next week's meeting of the Organization of Petroleum Exporting Countries for signs the cartel could boost production to help lower prices. OPEC leaders have said this week at a conference in Qatar that the oil market is adequately supplied.

In other Nymex trading, natural gas added 0.2 cent at $3.42 per 1,000 cubic feet. Heating oil gained 1.1 cents to $2.99 a gallon and gasoline futures slid 0.6 cent to $2.59 a gallon.