LONDON: Oil prices jumped nearly 4 percent on Monday to over $54 a barrel, the highest level in nearly three months, as a US plan to purge banks of toxic assets triggered a rally on Wall Street.
"The rise in the stock market<http://economictimes.indiatimes.com/Oil-hits-3-month-high-as-stock-markets-climb/articleshow/4308193.cms#>points to improved (energy) demand," said Christopher Bellew, oil broker at Bache Commodities in London. US crude rose $1.33 to $53.40 a barrel by 1700 GMT having earlier climbed to $54.05, its highest price since Dec. 1. London Brent crude rose $1.80 to $53.02. US crude oil<http://economictimes.indiatimes.com/Oil-hits-3-month-high-as-stock-markets-climb/articleshow/4308193.cms#>has climbed from below $33 last December due in part to aggressive supply cuts from the Organization of the Petroleum Exporting Countries. But prices remain almost $100 below last summer's peak as the global economic crash erodes consumption. The US government said it would offer financing for investors to unburden banks <http://economictimes.indiatimes.com/Oil-hits-3-month-high-as-stock-markets-climb/articleshow/4308193.cms#>of up to $1 trillion in soured mortgages and other distressed assets that are blocking lending and worsening the recession, sending Wall Street up around 4 percent Monday. Stocks also received support from data showing US existing home sales rose in February. Dealers said the plan could help brighten the outlook for global business and consumer energy demand, which has been shrinking for the first time in a quarter century. An oil strike in Brazil encouraged crude's gains, dealers said. Workers at Brazilian energy firm Petrobras began a five-day strike on Sunday in a bid to cut crude output in protest over job cuts, pay and conditions, a union leader said. By Monday afternoon, one Brazilian oil platform had been shut as a result of the strike. A similar strike in July in South America's second-largest oil producer had no material effect on production, but workers have said they are promising bigger impact this time. Signs of higher demand in China, the world's second-largest consumer, could also lend<http://economictimes.indiatimes.com/Oil-hits-3-month-high-as-stock-markets-climb/articleshow/4308193.cms#>support. China's implied oil demand climbed 0.5 percent in February after three months of declines, Reuters calculations from official data showed. The global economy is set to shrink 1 to 2 percent this year, World Bank President Robert Zoellick said on Saturday. He said the depth of the slowdown was unprecedented since the 1930s Great Depression. B.KARTHICK RESEARCH ANALYST WWW.KENCES1.BLOGSPOT.COM <http://www.kences1.blogspot.com/> --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Kences1" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/kences1?hl=en -~----------~----~----~----~------~----~------~--~---
