After falling 50% over the last 3 months, some investors think crude's slide has gone too far.
NEW YORK (CNNMoney.com) -- The price of oil rose Friday, after slumping to a 13-month low in the previous session, as investors appeared more upbeat about future demand for energy.
Light, sweet crude for November delivery was up $2.43 to $72.28 a barrel on the New York Mercantile Exchange.
The price of oil settled below $70 a barrel Thursday for the first time in more than a year. Oil has lost roughly half its value since it settled at all-time high above $145 a barrel in July.
The oil market has been dominated by concerns that a prolonged economic slowdown would curb demand for energy. But some traders now say the price of oil has been driven down too far.
"The market is very oversold," said Peter Beutel, oil industry analyst at Cameron Hanover in Connecticut. "Now that we're out of the meltdown phase, the market is starting to look ahead."
The market is also digesting a surprise move Thursday by the Organization of the Petroleum Exporting Countries to hold an emergency meeting earlier than it had originally planed.
OPEC member countries control two-thirds of the world's crude supplies and analysts say its decision belies a desire to put a floor under the rapidly declining price of crude.
"OPEC is starting to panic," Beutel said. The cartel is expected to cut production by as much as 1 million barrels a day, he added.
Oil's decline helped fuel gains in the stock market Thursday as equity investors viewed falling energy prices as a boon for consumers and businesses.
Retail gasoline prices fell another 4 cents overnight to a national average price of $3.04 a gallon. Gas is down more than 25% after soaring to an average of $4.11 in July.
As gas prices retreat, households should have more money to spend on discretionary items. That could help speed an economic recovery since consumer spending makes up two-thirds of the nation's gross domestic product.
Recent signs of progress in the credit market have improved the outlook for energy demand, said Tom Pawlicki, energy analyst at MF Global in Chicago.
"There's a bit more confidence in credit situation," Pawlicki said. "That's helping the stock market and boosting the oil market."
The overnight Libor rate fell to 1.67% from 1.94% Thursday, according to the British Bankers' Association. The key bank-to-bank lending rate is now at its lowest level since Sept. 20, 2004, when the rate was 1.66%.
Last Thursday, overnight Libor reached 5.09% and had spiked as high as 6.88% after the U.S. $700 billion bailout bill was signed into law on Oct. 3.
