Oil Rises More Than $2

Crude oil rose more than $2 a barrel in New York on speculation that a 10 percent drop in prices over the previous two days was larger than justified.

Futures touched $54.67, the lowest since Jan. 30, 2007, earlier today when the International Energy Agency slashed its 2009 oil-demand forecast by the most in 12 years amid deteriorating global economic growth. OPEC plans to meet in Cairo at the end of the month to discuss a further production cut.

Crude oil for December delivery rose $2.08, or 3.7 percent, to settle at $58.24 a barrel at 2:42 p.m. on the New York Mercantile Exchange. Prices have tumbled 60 percent since reaching a record $147.27 on July 11.

Futures also rose because the U.S. stock market rebounded. The Dow Jones Industrial Average climbed 552.59, or 6.7 percent, to 8,835.25, after tumbling as much as 317.24 points earlier today. The Standard & Poor's 500 Index increased 58.99 points, or 6.9 percent, to 911.29.

U.S. crude-oil stockpiles rose 22,000 barrels to 311.9 million barrels last week, the Energy Department said today. Inventories were forecast to climb 1 million barrels, according to the median of 13 responses in a Bloomberg News survey.

The Organization of Arab Petroleum Exporting Countries is scheduled to meet in Cairo on Nov. 29. Non-Arab members of the Organization of Petroleum Exporting Countries, such as Venezuela, Iran and Angola, will be invited to take part in talks about the oil market afterwards, OPEC President Chakib Khelil told Algerian radio today.

OPEC decided at a meeting in Vienna last month to cut the production target for 11 of the group's members by 1.5 million barrels a day, from 28.8 million barrels a day.

Brent crude oil for December settlement declined 38 cents, or 0.7 percent, to settle at $51.99 a barrel on London's ICE Futures Europe exchange. Futures touched $50.60, the lowest since May 31, 2005.

The December futures contract expired today. The more-active January contract rose $1.72, or 3.2 percent, to settle at $56.24 a barrel.

TradingEconomics.com, Bloomberg.com
11/13/2008 3:14:21 PM