Business | Oil & Gas
Oil rebounds from 19-month low in US
Oil rose from a 19-month low in New York as rising stock indexes allayed concern about waning demand and a weaker dollar bolstered the appeal of commodities.
- Bloomberg
- Published: 23:20 November 7, 2008
New York: Oil rose from a 19-month low in New York as rising stock indexes allayed concern about waning demand and a weaker dollar bolstered the appeal of commodities.
Oil prices may rise this week, according to a Bloomberg News survey of analysts, as traders view the plunge in crude prices to below Dh220.40 ($60) a barrel as excessive. Equity markets in Europe and US index futures recovered on speculation that interest rate cuts will reverse an economic slowdown.
Oil in the last two or three weeks has followed equity markets a lot, and that's certainly a reason why crude hasn't held below $60," said Gerrit Zambo, an oil trader at BayernLB in Munich. "If we stay positive in equity markets and the dollar doesn't gain a lot, we might see oil prices hold."
Oil for December delivery climbed as much as $1.703, or 2.9 per cent, to $62.50 a barrel on the New York Mercantile Exchange.
The contract earlier fell to $59.97 a barrel, the lowest since March 22, 2007, and headed for an 8.5 per cent decline last week.
Brent crude oil for Dec-ember settlement rose as much as $1.57, or 2.7 per cent, to $59 a barrel on London's ICE Futures Eur-ope exchange.
The dollar fell for a third day against the yen and declined against the euro on speculation a government report will show the US economy lost the most jobs since 2003, bolstering the case for the Federal Reserve to lower rates.
US fuel demand during the past four weeks averaged 19.1 million barrels a day, down 6.7 per cent from a year ago, the Energy Department reported November 5. Gasoline consumption over the period was down 2.3 per cent at 9 million barrels a day.
The International Monetary Fund projects the economies of the US, Japan and euro zone will shrink next year in a simultaneous decline.
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