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Oil up to near $82 a barrel in Europe after German approval for enlarged EU debt fund
Oil prices ticked up nearer to $82 a barrel Thursday after Germany to approved a measure to strengthen a bailout fund intended to help Europe overcome its debt crisis.
By early afternoon in Europe, benchmark oil was up 53 cents to $81.74 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $3.24, nearly 4 percent, to $81.21 per barrel on the Nymex on Wednesday.
In London, Brent crude for November delivery was up 59 cents at $104.40 on the ICE Futures exchange.
Oil rose sharply earlier this week as Europe appeared to get a better handle on its debt crisis. But signs of disagreement resurfaced among European leaders on how best to help Greece, which only has enough money to pay its bills through mid-October.
The country risks a default on its massive debts, an event that could spiral into a major financial and banking crisis across the continent. Some experts say a Greek default could lead to a global recession, thus hurting demand for oil.
"Crude oil continues to fluctuate wildly over the same ground as the sentiment pendulum swings between confidence and pessimism over whether or not the global economy is headed for recession," said Michael Fitzpatrick, editor-in-chief of The Kilduff Report in New York.
Falling petroleum consumption in the U.S. was another factor weighing on oil prices. The Energy Department reported Wednesday that gasoline demand last week dropped 2.4 percent from the same time last year. U.S. crude supplies grew by 1.9 million barrels last week. Analysts thought oil supplies would remain unchanged.
On Thursday, commodities traders turned their attention to Germany's parliament, which voted overwhelmingly in favor of a measure to give a European rescue fund more powers and money to fight the debt crisis. Finland's parliament approved the proposal Wednesday.
"So far this week, prices have soared and plunged on the latest temperature of voters in Germany and Finland," Cameron Hanover said in a report. "The world's entire investment community seems to be waiting for a resolution of an extremely knotty sovereign debt crisis."
Markets are also awaiting the U.S. government's third and final estimate on economic growth, to be released later Thursday. Economists are expecting GDP growth of 1.2 percent for April-June, slightly better than the 1 percent growth for the quarter that the government reported last month.
Crude oil has fallen about 15 percent since July and is down 26 percent since hitting a high for the year of $113.93 per barrel on April 29.
In other November contract on the Nymex, heating oil rose 1.98 cents to $2.8469 per gallon, gasoline futures rose 1.42 cents to $2.5895 per gallon and natural gas was down 1 cent at $3.789 per 1,000 cubic feet.
Pamela Sampson in Bangkok contributed to this report.