Brent crude oil began the week with gains and traded at $108.27 at 10:15 GMT on Monday morning. The commodity found support after eurozone leaders reached a last minute deal for Cyprus' bailout and averted a financial meltdown and possible eurozone exit.
The plan includes $13 billion worth of funding in exchange for deep restructuring of the country's banking sector. Cyprus' second largest bank, Cyprus Popular Bank PLC, will be closed and large deposits over 100,000 euros will face heavy losses. Although the plan kept the tiny island nation's banks from failing, many believe the damage to Cyrpus' economy has already been done and the country has a difficult and painful road ahead.
Gains from the Cypriot deal are likely to be limited, as most analysts expected the eurozone to come to a last minute decision.
News that Italy may soon form a coalition government following an inconclusive election back in February injected positivity into the market. According to CNBC, President Giorgio Napolitano has asked Pier Luigi Bersani if he will be able to win enough support to form a new government.
Tension in the Middle East also lent support to Brent prices after the head of Syria's opposition group stepped down on Sunday. Ahmed Moaz al-Khtatib's decision to resign has complicated Western efforts to support Syrian rebels and end President Bashar al-Assad's rule.
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Moving forward, investors will be watching for economic data from the US and China for signs of improvement. China's official PMI and US confidence data and durable goods orders will be awaited in hopes of growth momentum and in turn a better oil demand outlook.
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