Oil up in Asia on renewed Europe optimism

At best, a mild recession and stagnant growth awaits the eurozone, says report.

SINGAPORE: Crude oil prices rose in Asia Wednesday on growing hopes of imminent European Central Bank intervention to ameliorate the eurozone debt crisis, analysts said.

New York's main contract, light sweet crude for October delivery, gained 15 cents to $96.99 a barrel in the afternoon and Brent North Sea crude for delivery in October added six cents to $114.70.

"Oil prices rose... as hopes that the European Central Bank will act to contain the region's debt crisis boosted crude futures and sent the euro to a seven-week peak versus the dollar," Phillip Futures said in a report.

Hopes of ECB intervention grew after the interest rate, or yield, on Spanish 10-year bonds fell to 6.211 percent from 6.443 percent on Tuesday, with the rate dipping as low as 6.2070 percent in intraday trading.

Comments from senior members of German Chancellor Angela Merkel's party suggesting that Germany was more willing to give some leeway in the bailout of debt-wracked Greece also lent support to markets.

But IG Markets Singapore market strategist Justin Harper warned that the eurozone's troubles were far from over.

"Coming out of the danger zone for the time being doesn't automatically lead to the green grass of growth and prosperity. At best, a mild recession and stagnant growth awaits the eurozone," he said in a report.