Business | Oil & Gas
Oil rebounds above $43 on supply cuts
Oil rose above $43 (Dh157.7) a barrel yesterday, as a rebound in global equity markets and evidence of supply cuts by top exporter Saudi Arabia helped the market break a losing streak.
- Reuters
- Published: 23:32 December 8, 2008
London: Oil rose above $43 (Dh157.7) a barrel yesterday, as a rebound in global equity markets and evidence of supply cuts by top exporter Saudi Arabia helped the market break a losing streak.
The market fell 25 per cent last week, its biggest weekly fall in nearly 18 years, depressed by the grim outlook on the world economy.
US crude for January delivery was up $2.77 to $43.58 a barrel yesterday afternoon. It fell more than 6 per cent on Friday to close at $40.81, its lowest since December 2004.
London Brent crude rose $2.95 to $42.69 a barrel.
"Prices are higher on account of a short-covering bounce from extremely oversold conditions," Edward Meir, of futures broker MF Global, said. "Opec's meeting is nine days away, meaning that we could see some strengthening leading into the meeting," Meir said.
Oil has plunged more than $100 a barrel from a record peak above $147 in July, as the credit crisis hurts the economy and shrink demand for fuel.
Monday's rally spanned the commodities complex, with gold and copper rebounding strongly. European shares were firmer after strong gains in Asia and US shares opened sharply higher.
Oil could also find support from predictions of a cold winter in the United States, with December set to be the coldest since 2000 on average.
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