OIL rose 1% on Friday as stock markets recovered from early lows caused by continuing economic gloom.
US crude rose 51c to $49,93 a barrel, after earlier dipping to $48,25, the lowest level in three-and-a-half-years. London Brent crude settled up $1,11 at $49,19 a barrel.
On Thursday, oil fell more than 7% on economic data to settle at its lowest since May 2005. It has plummeted by nearly $100 a barrel since record highs of more than $147 in July, with demand shrinking as the credit crisis hit large consumer nations. US stocks bounced back on Friday after falling into negative territory as shares of financials, including Citigroup, declined and investors worried about the deepening economic slump.
Stocks turned higher on Friday afternoon after NBC News reported that New York Federal Reserve president Timothy Geithner will be nominated as president-elect Barack Obama’s treasury secretary. Further support came as the dollar fell against a basket of other currencies. A weaker dollar makes oil cheaper for holders of other currencies. “Crude is up as the stock market is bouncing and refined products are moving up, particularly heating oil, on cold weather,” Phil Flynn of Alaron Trading said. “Prices of other major commodities such as gold and silver are up and the dollar is down, which is also supportive.” Reuters
