Oil rose above $52, following European equities and U.S. stock index futures higher, after the government guaranteed $306 billion of Citigroup assets. The U.S. currency dropped versus the euro and yen, making dollar-denominated commodities more attractive to foreign buyers.
Crude oil for January delivery advanced as much as $2.16, or 4.3 percent, to $52.09 a barrel on the New York Mercantile Exchange. It traded for $51.63 at 12:50 p.m. London time.
Demand for industrial metals may be boosted by plans for a second Chinese stimulus package announced this weekend. The National Development and Reform Commission, the nation’s top economic planning agency, proposed tax cuts, salary increases and larger housing subsidies.
Oil ministers from the 13-nation Organization of Petroleum Exporting Countries group meet in Cairo on Nov. 29. Slowing global demand has left a 1 million-barrel-a-day oversupply that needs to be removed by year-end, Venezuela’s Oil Minister Rafael Ramirez said yesterday.
Brent crude oil for January settlement was at $50.52 a barrel, up $1.33, on London’s ICE Futures Europe exchange at 12:06 p.m. London time.
The benchmark crude price used by OPEC, derived from the cost of oil produced by each of its 13 members, fell to its lowest since February 2005 on Nov. 21. This so-called OPEC basket declined $1.50 to $42.56 a barrel, the group said in an e-mail today.
The dollar weakened 1.2 percent to $1.2690 per euro as of 12:06 p.m. London time from $1.2540 on Nov. 21.