Oil jumps to $92 after Europe debt plan

Oil prices jumped to near $92 a barrel today in Asia after European leaders agreed on a plan to reduce Greece's debt burden.

Benchmark crude for December delivery was up $1.60 at $91.80 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $2.97, or 3.2%, to settle at $90.20 in New York yesterday.

Brent crude was up 82 cents at $109.73 a barrel on the ICE Futures Exchange in London.

After a meeting that began yesterday, EU President Herman Van Rompuy said early today that policy-makers struck a deal that will reduce Greece's debt to 120% of its GDP in 2020. The plan will require banks to take on 50% losses on their Greek bond holdings.

Van Rompuy also said the Eurozone and International Monetary Fund will give Greece another euro 100 billion ($140 billion).

Investors cheered the accord as a first step towards containing Europe's sovereign debt crisis. The Dow Jones industrial average gained 1.4% yesterday and stock markets in Asia rose today.

Crude has jumped about 21% from $75 on October 4 amid growing investor optimism that the US economy will avoid a recession this year.

In other Nymex trading, heating oil rose 0.4 cents to $3.06 per gallon and gasoline futures gained 0.6 cents at $2.68 per gallon. Natural gas advanced 0.9 cents at $3.67 per 1,000 cubic feet.