Brent crude oil rose above $100 on Monday after a weekend rescue package for Spanish banks calmed fears of an imminent Eurozone collapse and the breakdown of nuclear talks between the U.N and Iran renewed concerns over oil supplies.
The larger-than-expected Spanish rescue eased some worries over Europe’s debt crisis, boosting stock markets and a range of commodities. But markets remained nervous, given that the pace of global growth was uncertain and elections were due in Greece on Sunday.
Brent futures for July rose as high as $102.21 a barrel, up $2.74, and traded around $100.30 by 1120 GMT. US crude futures jumped to as much as $86.64 and were 85 cents higher at $84.95 by 1120 GMT.
“The aid for Spanish banks has revived risk appetite for a while at least,” said Carsten Fritsch, commodity analyst at Commerzbank in Frankfurt.
“This positive market sentiment could last some days, although there is still event risk – the Greek elections, Iran – that could prevent big gains from here,” he added.
Euro zone finance ministers agreed on Saturday to lend Spain up to 100 billion euros ($125 billion), making the country the fourth to seek assistance since Europe’s debt crisis began.
Yet with the economy contracting, one in four Spanish workers out of a job and Greek elections next weekend overshadowing the entire zone, investors are wary how far the latest deal will go in helping the region tackle its debt crisis.
Leaders of Greece’s two traditional ruling parties warned on Sunday of a political stalemate after parliamentary elections next week and called for a government of national unity to prevent a repeat of the confusion that followed the last vote in May.
Opinion polls cannot now be published in Greece, so the outcome of the June 17 elections is uncertain.
The result will decide Greece’s future, with voters split over a 130 billion euro international bailout to prop up the economy, now in its fifth year of recession, at the price of harsh and resented austerity measures.
