Oil rebounds to near $77 on European loan package

SINGAPORE: Oil prices rebounded to near $77 a barrel Monday in Asia from last week's 14 percent sell-off after Europe and the IMF pledged nearly $1 trillion to help defend the embattled euro.

Benchmark crude for June delivery was up $1.74 to $76.85 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The June contract fell $2 to settle at $75.11 on Friday.

The European Union Commission and International Monetary Fund pledged a euro750 billion loan package Monday after the euro plunged last week amid investor concerns a debt crisis in Greece could spread to other European countries.

Crude prices are down from an 18-month high of $87.15 a barrel early last week as the debt crisis battered the euro, which rallied Monday to $1.2944 from $1.2759.

Commodities priced in dollars, such as oil, become less expensive for investors holding euros as the U.S. currency weakens.

``The EU rescue package has calmed financial markets for now,'' said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. ``Equities are going up, the dollar is coming down and oil is reacting to that.''

Asian stocks rose in early trading Monday after falling most of last week.

``Last week's drop left oil oversold,'' Shum said. ``We expect prices to creep back above $80, possibly this week.''

In other Nymex trading in June contracts, heating oil rose 3.84 cents to $2.118 a gallon, and gasoline added 3.46 cents to $2.160 a gallon. Natural gas gained 1.4 cents to $4.029 per 1,000 cubic feet.

In London, Brent crude was up $1.73 to $80.00 on the ICE futures exchange.