Oil prices surge on ECB stimulus hopes

Oil prices rebounded on Wednesday, recovering from recent multi-month lows as sentiment was supported by growing hopes of possible central bank intervention in the eurozone debt crisis, analysts said. Financial markets were also boosted after G7 European leaders vowed to respond "speedily" to the eurozone's long-running debt crisis. In late morning London deals, Brent North Sea crude for July rallied 96 cents to $99.80 per barrel. New York's main contract, West Texas Intermediate crude for delivery in July gained 89 cents to $85.18 a barrel. "Oil prices, in line with broader risk assets, are staging solid corrective gains today amid hope for further central bank intervention as London returns to the market after the long weekend," said Sucden analyst Jack Pollard. "The macro situation is showing little clear sign of improvement with Spain seemingly heading towards a bailout, whilst the US seems to be recoupling with Europe as macro data heightens the prospect of growth slowing even further." Europe's main stock markets meanwhile rallied Wednesday on hopes that the European Central Bank (ECB) could deliver more stimulus measures to fight the region's debt crisis, dealers said. Later this morning, at 1145 GMT, the ECB is to announce the outcome of its latest monetary policy meeting in Frankfurt. The central bank is widely predicted to refrain from cutting borrowing costs this month below their current historic low of 1.0 percent, but it could decide to introduce more emergency measures amid the ongoing debt crisis. Crude futures were also buoyed on Wednesday after G7 European leaders vowed to respond "speedily" to the continent's debt crisis. A decline in US crude reserves also lent support to prices. "There has been some correction in oil prices after the G7 talks with some respite in the gloom over the eurozone debt crisis, and also a drop in US stockpiles has uplifted the market," said Justin Harper, market strategist at IG Markets Singapore. European finance ministers from the Group of Seven economies had vowed after emergency talks on Tuesday to respond swiftly to the continent's fiscal crisis, Japan's finance minister said. "We were able to share our recognition on the European issue," Jun Azumi was quoted by Jiji Press as saying after a conference call with his G7 counterparts. "The European side stated that they will respond to it speedily." Meanwhile, a decline in US crude stocks has provided a brief respite for investors still fretting about demand in the world's top oil-consuming nation. Data from the American Petroleum Institute (API), an industry body, showed nationwide crude stocks fell by 1.8 million barrels in the past week. The API figures are usually released ahead of the US Department of Energy's weekly Wednesday report on crude stockpiles. The oil market had struck fresh multi-month lows at the start of the week, as recent dismal economic data sparked fears over the health of the global economy -- and future energy demand. Prices had slumped Monday as demand worries weighed following poor economic data from China, Europe and the United States, analysts said. New York crude had fallen to $81.21 per barrel, touching a level that was last seen on October 7. Brent oil meanwhile tumbled to $95.63, reaching the lowest level since January 2011.