Oil turns positive above $64
Oil erased early losses to rise by one dollar to above $64 on Tuesday, tracking a rebound in Asian stock markets as investors returned to buy beaten-down shares.
Oil hovers at $102The U.S. dollar's easing from an earlier 2- year high against the euro also helped and traders looked ahead to signs that OPEC was actually slashing output by about 5 percent in line with a decision taken last week.
U.S. light crude for December delivery rose $1 or 1.6 percent to $64.22 a barrel by 6:46 a.m. British time, after touching an early low of $61.75.
London Brent crude gained 31 cents to $61.72 a barrel.
"This is a market driven by sentiment," said Gerard Rigby, an analyst with Fuel First Consulting in Sydney. "It will continue to get direction from the equities markets."
Japan's Nikkei average climbed 6.4 percent, encouraged by a softer yen on Tuesday and after the benchmark briefly broke below 7,000 for the first time in 26 years, taking with it commodities, which have traded largely in line with equities recently.
Japan fought to hold back waves from the financial crisis, restricting investor bets on falling share prices and trying to talk down a rallying yen that has threatens to deepen its economic downturn.
The credit crisis, which began with failing U.S. mortgages, has mushroomed into a worldwide rout as investors dump stocks and commodities, shun higher-risk emerging markets and seek out the safest government bonds and currencies.
Oil prices have dropped by nearly 60 percent from a record above $147 a barrel in July as global economic turmoil dents world fuel consumption, with some analysts saying a fall to $50 a barrel - widely seen as the cash cost of production for many newer oil projects - is possible in the short term.
The decision by the Organisation of the Petroleum Exporting Countries last week to cut 1.5 million barrels per day of output has done little so far to stem oil's fall.
|
|
