The results of today’s EU summit fell well short of initial expectations as an EU-wide treaty was blocked; however, 23 of 27 EU members still managed to reach an agreement to tighten fiscal discipline within the euro zone, sending equities and oil prices higher.
The group of 23, which includes all of the 17 euro zone members, reached a deal to cap budget deficit and borrowing and launch the permanent bailout fund, the European Stability Mechanism, in July 2012, a year earlier than was initially planned.
In addition, EU policymakers have decided to cap Europe’s bailout funds at €500 billion.
The deal failed to win the support of four EU members including the UK. British Prime Minister David Cameron decided to block changes to the EU treaty after extensive negotiations with French President Nicolas Sarkozy and the new deal failed to safeguard the British financial sector.
Demand for riskier stocks received more support from speculation that China is preparing to invest as much as US$300 billion in Europe and the US.
While London Brent crude edged higher on the news, US crude oil contracts were in decline, still pressured by this week’s official US inventories figures, which signalled a decline in oil demand from the world’s largest energy consumer.
The US Department of Energy said late on Wednesday that crude oil stockpiles in the US added 1.34 million barrels during the week to December 4, while expectations were for a decline of over a million barrels.
The report also showed that gasoline stockpiles added a massive 5.15 million barrels to reach five month highs.
US light, sweet crude for January delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), fell 19 cents to US$98.15/barrel in morning trade in New York.
January Brent crude added 8 cents to reach US$108.2/barrel on the ICE Exchange this afternoon.
Today’s top risers in the oil and gas sector were:
Nighthawk Energy (LON:HAWK), up 11.5 percent at 3.17 pence at midday
Desire Petroleum (LON:DES), up 5.5 percent at 22.9 pence
Argos Resources (LON:ARG), up 4.5 percent at 14.25 pence
Aurelian Oil & Gas (LON:AUL), up 4.5 percent at 18.5 pence
Rockhopper Exploration (LON:RKH), up 3.5 percent at 247.5 pence
The top fallers were:
Urals Energy (LON:UEN), down 18 percent at 7.8 pence at midday
Max Petroleum (LON:MXP), down 9 percent at 12.28 pence
TXO (LON:TXO), down 7.5 percent at 0.95 pence
PetroLatina (LON:PELE), up 7 percent at 13.25 pence
Sirius Petroleum (LON:SRSP), down 6.5 percent at 3.75 pence