Singapore: Oil prices rose Monday as gains in global stock markets helped offset worries of a possible US recession that would stunt oil demand.
Asian stock markets climbed Monday on improved market sentiment after Wall Street rose last week. Japanese shares surged 2.48% in morning trade on the Tokyo Stock Exchange, while in Hong Kong, the blue chip Hang Seng Index rose nearly 4 %.
The Dow Jones industrial average gained more than 0.7% Friday as investors set aside concerns that the US economy lost jobs last month and focused on Microsoft Corp.’s bid for Internet company Yahoo Inc. and a possible rescue plan for the troubled bond insurance sector.
Energy investors often view stocks as a proxy for economic growth, and in some recent sessions, movements in the oil market have closely followed that of global equities.
Light, sweet crude for March delivery added 19 cents to $89.15 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore.
The contract dropped $2.79 to settle at US$88.96 a barrel on Friday after the US Labor Department reported that employers cut 17,000 jobs last month, the first reduction in more than four years and a sign that the economy continues to weaken.
Construction spending also fell by a record amount, according to the Commerce Department, reflecting a sharp pullback in residential building.
Responding to recent oil price declines, the Organization of Petroleum Exporting Countries said Friday it will maintain current oil output levels due to concerns that a weakening global economy will result in softer demand.
However, looking ahead to the next meeting in March, Qatar’s Abdullah bin Hamad Al Attiyah said “all the possibilities are there”, shorthand for a possible cut in production, if the US economy weakens enough to cut into demand.
In London, Brent crude futures rose 19 cents to $89.63 a barrel on the ICE Futures exchange.
Heating oil futures rose 0.63 cent to $2.4552 a gallon while gasoline prices added 1.24 cents to $2.2958 a gallon.
Natural gas futures lost 9.7 cents to $7.643 per 1,000 cubic feet.