By Christian Schmollinger Dec. 9 (Bloomberg) -- Crude oil traded near $44 a barrel after rallying for the first day in seven yesterday on speculation global economic stimulus plans will boost demand for raw materials. Commodities, including oil, copper and corn, climbed following President-elect Barack Obama's pledge to revive the U.S. economy with the biggest public works program in a half century. Australia began making the first payments this week for its A$10.4 billion grant program. Chinese leaders said yesterday that they are considering cutting personal income tax rates. ``At the end of the day it's U.S. demand that's going to pick this market out of the bog mire,'' said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. ``Oil prices have been sold off heavily in the last couple months so there will always be buying interest on positive news.'' Crude oil for January delivery was at $43.90 a barrel, up 19 cents, at 12:57 p.m. Singapore time on the New York Mercantile Exchange. Yesterday, futures increased $2.90, or 7.1 percent, to $43.71 a barrel. They touched $40.50 on Dec. 5, the lowest since Dec. 13, 2004. Prices have fallen 70 percent since reaching a record $147.27 in July. Congress and President George W. Bush also are close to agreeing on a $15 billion rescue of U.S. automakers that may be signed this week. General Motors Corp., Ford Motor Co. and Chrysler LLC would be eligible for loans. White House and congressional leaders said a final accord was likely yesterday and the House and Senate will return for special sessions this week to vote on the package. Stocks, Commodities Rally Stocks rallied worldwide, led by commodity producers, on Obama's pledge to increase infrastructure spending. The Dow Jones Industrial Average rose 298.76, or 3.5 percent, to 8,934.18. Japan's Nikkei 225 Stock Average was up 1.6 percent at 9:42 a.m. Tokyo time. Last week, oil fell the most since 1991 and metal prices slumped after economic data showed the recession is getting worse. The U.S. economy lost 533,000 jobs in November, bringing job losses this year to 1.91 million. ``If you look at the jobs cuts announcements we are certainly not out of woods with the downturn,'' said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore. ``But these stimulus packages ought to start to have an effect eventually.'' Copper futures for March delivery rose 1 cent, or 0.7 percent, to $1.5080 a pound on the Comex division of Nymex. Yesterday, they added 12.45 cents, or 9.1 percent, to settle at $1.498 a pound, the biggest one-day increase since Oct. 29. Commodity Index Corn futures for March delivery rose 20.75 cents, or 6.7 percent, to settle at $3.30 a bushel yesterday on the Chicago Board of Trade. The Reuters/Jefferies CRB Index of 19 raw materials climbed 5.2 percent to 219.36 yesterday. The gauge lost 54 percent since reaching a record in July as the credit crunch choked worldwide growth. The Baltic Dry Index, a measure of shipping costs for commodities, advanced for the first time in 14 days after a record gain for so-called capesize vessels. Saudi Arabia, the world's largest crude oil exporter, is furthest from complying with OPEC quotas, dulling the impact of the group's policy as members prepare to make a fresh cut in production targets at a Dec. 17 meeting in Algeria. The country is producing at 107 percent of its Organization of Petroleum Exporting Countries quota, according to Bloomberg estimates. That's more than Kuwait, Iran, Venezuela or the United Arab Emirates. Production Quotas ``The base case cut is 2 million barrels but I don't think it's going to surprise anyone, so if they want to shock the market then 3 million would have to be required,'' said ANZ's Pervan. ``But that response may be short lived because they'll want to see some compliance.'' Saudi Arabia has started to trim oil exports. State oil company Saudi Aramco will reduce shipments to Japanese refiners including Nippon Oil Corp., Idemitsu Kosan Co. and Cosmo Oil Co. by 7 to 10 percent in January from levels agreed under annual contracts, said officials at two refineries who received notices yesterday from the company. OPEC pumps more than 40 percent of the world's oil and agreed to cut daily output 1.5 million barrels in October as prices slumped and inventories rose. Libya's top oil official, Shokri Ghanem, said yesterday that OPEC should make a ``substantial'' output cut at its meeting in Algeria. Brent crude oil for January settlement was at $43.44 a barrel, up 2 cents, on London's ICE Futures Europe exchange at 12:56 p.m. Singapore time. The contract yesterday rose $3.68, or 9.3 percent, to settle at $43.42 a barrel. To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.

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