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Oil rebounds 7% on Obama's public works spending plan |
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08:33, December 09, 2008 |
Crude oil recovered from last week's losses and rallied above 43 U.S. dollars a barrel Monday after President-elect Barack Obama announced public works spending plan to revive the economy.
Light, sweet crude for January delivery gained 2.9 dollars to settle at 43.71 dollars a barrel on the New York Mercantile Exchange. Price rose to as high as 44.70 dollars a barrel during the trading.
Crude futures rebounded from a four-year low of 40.81 dollars a barrel reached last Friday after Obama announced over the weekend plans for the largest U.S. public works spending program in half a century. Investors speculated that the spending on roads, bridges and repairing school buildings will boost raw material demand and help to avert the economic downturn.
Oil was also pressured Monday as OPEC signaled possibility of a deeper output cut. OPEC President Chakib Khelil said Saturday that the organization would announce a "severe" reduction of production quotas when it meets on Dec. 17 in Algeria. Some analysts predicted OPEC would cut supply by as much as 2 million barrels per day.
Crude oil is around 70 percent down from its record intraday price 147.27 dollars a barrel. OPEC announced an output quotas decrease of 1.5 million barrels a day in October, but failed to stabilize the plunging oil price as the investors focused on the slumping demand caused by a global economic slowdown.
In London, Brent crude for January delivery jumped 3.68 dollars to settle at 43.42 dollars a barrel on the ICE Futures Exchange.
Source: Xinhua
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