Singapore: Oil rose to above $51 a barrel on Wednesday, after a near 7% fall the previous day, when data showed the US economy last shrank at its fastest pace in seven years, highlighting slowing demand in the world’s largest oil consumer.
A new $800 billion Federal Reserve rescue package helped US stock markers Dow and S&P 500 achieve their first three-day run since the summer on Tuesday after oil settled, but failed so far to lift oil prices.
US light crude for January delivery rose 31 cents to $51.08 a barrel by 7:15am (IST), having settled down $3.73 at $50.77 on Tuesday after two-day gains of nearly 10%.
Oil prices have failed to post three consecutive days of gains since September.
London Brent crude rose 34 cents to $50.69.
Revised US Commerce Department data showed on Tuesday third-quarter US gross domestic product dropped 0.5% against a year earlier, the sharpest fall since the third quarter of 2001.
Consumers spending, which accounts for two-thirds of economic activity in the US, fell to a 28-year low.
Slowing demand and recession concerns have knocked oil from its peak above $147 a barrel in July, prompting members of the Organization of Petroleum Exporting Countries to call for further supply reductions to support prices.
Opec ministers next gather in Cairo on 29 November for a consultative session, with the organisation’s next policy-setting meeting in Algeria on 17 December.
Price hawk Iran on Tuesday said non-Opec states should cooperate with Opec in stabilising the oil market because, if the group acts alone, prices will continue to fall.
Opec members Iran and Venezuela have called on the cartel to cut production by at least another 1 million barrels per day, after last month’s 1.5 million bpd cut failed to lift prices.
Another cut, which may be decided only at Opec’s meeting in December, could fail to raise prices.
Adding further gloom to Tuesday’s weak economic data, weekly oil and products US stocks data, due to be released at 9:05pm (IST), is expected to show another rise in US crude stocks.
Analysts polled by Reuters project a rise of 800,000 barrels in crude supplies, a 400,000 barrel-increase in gasoline stocks and a 800,000 barrel-fall in distillate inventories-which include heating oil- as cold weather hit the giant US Northeast market.