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Oil prices recover ground

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(Globalpost/GlobalPost)

Global crude oil prices bounced back on Wednesday after eurozone finance ministers and the European Central Bank (ECB) vowed to support Cyprus as a crucial bailout deal stood on the brink of collapse, analysts said.

Brent North Sea crude for delivery in May added 60 cents to $108.05 a barrel in London midday deals, having struck a three-month low earlier this week at $107.78 on Cyprus-linked demand worries.

New York's main contract, light sweet crude for April, rose 58 cents to $92.74 a barrel.

Prices had tumbled on Tuesday after lawmakers in Cyprus overwhelmingly rejected a levy on savings that was an integral part of a 10-billion-euro ($13 billion) rescue deal agreed between Nicosia and international creditors.

The bailout deal was the first in which private depositors were being made to help foot the bill, sparking public outrage in Cyprus and concerns globally that it could set a precedent for future rescue packages.

After the Cyprus vote, the Eurogroup of finance ministers said it stood ready to help the country in its reform efforts and reiterated an offer to ease the impact on smaller depositors in Cyprus.

The European Central Bank (ECB) also pledged to continue providing financial support for troubled Cypriot banks, quelling fears of a possible run by customers that could lead to a collapse of the country's financial system.

"There is now a feeling in the market that a deal will be reached, and that Cyprus will not spark a crisis by exiting the eurozone," said Victor Shum, managing director at IHS Purvin and Gertz in Singapore.

"But until there is clarity on the Cyprus issue, there is going to be a lot of volatility," he told AFP.

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http://www.globalpost.com/dispatch/news/afp/130320/oil-prices-recover-ground