Oil climbs above $108 after Cyprus rescue plan approved

Tuesday, 26 March 2013 00:11 -     - {{hitsCtrl.values.hits}}

SINGAPORE (Reuters) - Brent crude rose above $108 on Monday after euro zone ministers approved an EU-IMF plan for restructuring Cyprus’s banking sector, which could put the euro zone recovery back on track, stoking demand for oil.

Cyprus clinched a last-ditch deal with international lenders for a 10 billion euro ($13 billion) bailout that will shut down the Mediterranean island’s second largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians.

Brent crude had gained 34 cents to $108.00 a barrel by 0228 GMT, while U.S. crude increased by 34 cents to $94.05.

The plan, swiftly endorsed by euro zone finance ministers and which may not require further parliamentary approval, will spare Cyprus a financial meltdown by winding down Popular Bank of Cyprus and shifting deposits below 100,000 euros to the Bank of Cyprus to create a “good bank”.