Oil up in Asia but capped by lingering Europe fear

Agence France-Presse

Posted at Nov 15 2011 11:36 AM | Updated as of Nov 15 2011 07:36 PM

SINGAPORE - Oil recovered in Asian trade Tuesday after losses in New York caused by lingering concerns about Europe's debt crisis, analysts said.

New York's main contract, light sweet crude for December delivery was eight cents higher at $98.22 a barrel and Brent North Sea crude, also for December delivery, advanced 44 cents to $112.33.

However, the rebound in Tuesday's morning trade was too small to indicate that sentiment towards Europe has turned positive, analysts said.

"What follows is austerity and that is not good for economic growth and it means less oil consumption," Victor Shum, an analyst with energy consultancy Purvin and Gertz told AFP.

Crude prices had been trading higher Monday after the leaders of Italy and Greece stepped aside, lifting hopes that key debt-fighting legislation could be passed, while tensions tensions in the Middle East added upward pressure.

However, a falling euro and concerns that the countries' new leaders may not be able to implement the necessary changes led to fresh selling.

"We had some support mainly because of the structural changes in Greece and Italy, we had some optimism; then again we are getting concerns about the debt crisis in Europe," said Bart Melek of TD Securities.

The eurozone debt crisis, and its potential to stall global economic growth, have cancelled out the upward push on oil prices driven by new fears over Iran's nuclear ambitions amid concerns it is building an atomic bomb.