OREANDA-NEWS. November 19, 2010. The December contract gained USD 1.41 to USD 81.85 after closing lower for four days. Brent crude for January settlement climbed USD 1.77, or 2.1%, to USD 85.05 yesterday.

On Thursday, crude oil rose the most in two weeks as Ireland moved closer to a European Union-led financial bailout, strengthening the euro and boosting commodities. Oil rebounded from a 4-week low as Ireland’s central bank governor said he expects the country to accept financial assistance. Irish Central Bank Governor Patrick Honohan said in an interview yesterday he expects the country to ask the EU and the International Monetary Fund for “tens of billions” of euros to rescue its banks. The dollar fell 0.7% to USD 1.3622 per euro yesterday afternoon in New York, the biggest decline in two weeks. In our opinion the outlook for a solution to the Irish problem is improving, which could mean a stronger euro, a weaker dollar and higher commodities prices, including oil.

OPEC is happy with oil prices above USD 80/bbl, said Mohamed al-Hamli, the oil minister from the United Arab Emirates, while claiming that “there is some sort of stability” with oil at USD 75 to USD 80/bbl.

BNP Paribas raised on Thursday its 2011 forecast for the average US crude oil price to USD 88/bbl, up USD 2 from the bank's previous view, the bank said in a research note.

Moving forward, we expect Ireland to accept a modest debt package from the European Stability Fund with IMF involvement within the next few days. The amount will likely be insufficient to radically improve the country’s debt situation, but will again, as in the case of Greece, probably be enough to prevent extreme market volatility and stabilize the euro, which still means good news for oil as the dollar continues to weaken. All in all, we see Brent and WTI heading back towards the USD 85 mark, with the premium of Brent to NYMEX crude disappearing due to the latter’s improved fundamentals as shown in the recent inventory drawdowns across the board.