Oil Prices Rebound

Light, sweet crude for January delivery rallied 2.90 dollars to close at 43.71 dollars a barrel on the New York Mercantile Exchange.

In London, Brent North Sea crude for delivery in January leapt 3.68 dollars to settle at 43.42 dollars on the InterContinental Exchange.

Despite dismal economic conditions, global stock markets soared after US president-elect Barack Obama promised the biggest infrastructure investment plan in half a century over the weekend and the US Congress signaled a rescue of the Big Three US automakers.

Stock prices rallied worldwide on hopes that actions would speed and end to the recession.

"Global investors have apparently taken a significant degree of solace from Congress's apparent move towards a bailout of the auto industry and president-elect Obama's commitment to economic stimulus," said John Kilduff, an analyst at MF Global.

Analysts said that gains were driven by expectations the OPEC oil producers' cartel could slash its output later this month.

"Oil futures were higher as it looked increasingly like OPEC will respond to the sharp decline in oil prices by cutting output later this month," said Sucden analyst Michael Davies.

"Libya's top oil official, Shukri Ghanem, said OPEC should make a 'substantial' cut in output at next week's meeting."

The Organization of the Petroleum Exporting Countries (OPEC), which pumps 40 percent of the world's crude, is widely expected to cut oil production at a December 17 meeting in Oran, Algeria.

Despite the oil price bounce, underlying market sentiment remained fragile on deep concerns about weak energy demand, especially in the recession-hit United States, traders said.

Author: Ksenia Kochneva