Oil Surges on European, IMF $1 Trillion Bailout Package for Greece


Oil is surging in early morning trade Monday, as European nations and the International Monetary Fund agreed to a massive $1 trillion bailout package to rescue Greece.

The plan has led to a surge not only in the euro and European equities, but has reduced the risk premiums of euro zone sovereign debt, which have in turned buoyed demand for energy worldwide on hopes that the worst is over for the region.

At 0800 ET, Brent crude is up 3.9% at $81.30 a barrel, while light sweet crude is also 3.9% stronger at $78.02 a barrel, and natural gas is up 1.22% at $4.06 a million British thermal units.

There are concerns, however, that the massive package will be too high a burden for some European nations to bear. Worries abound too that Spain and Portugal, among other countries, will also need to be bailed out by the European Union.

On the corporate front, coal producer Peabody Energy Corp. ( BTU ) has reduced its offer for Australia's Macarthur Coal Ltd. ( MACDF ) on worries about Australia's proposal to impose a 40% tax on mining profits. Peabody has reduced its offer for the company to 15 Australian dollars a share, down from its earlier proposal of 16 Australian dollars, bringing its offer down to about 3.8 billion Australian dollars, or $3.4 billion.

In earnings news, Canada's oilfield services company Ensign Energy Services Inc. ( ESI ) reported first quarter earnings that missed analysts' estimates on lower pricing and falling revenue.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: BTU , ESI , MACDF

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