“The Citibank bailout has changed the face of everything,” said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. “There’s a hope that credit will now free up and people will make purchases. We may now see businesses increase purchases of raw materials if the credit crisis fades.”
Crude oil for January delivery rose 9 cents to $54.59 a barrel at 10:24 a.m. Sydney time on the New York Mercantile Exchange. Futures have dropped 63 percent since reaching a record $147.27 on July 11. Yesterday, futures increased $4.57, or 9.2 percent, to settle at $54.50 a barrel, the biggest one- day gain since Nov. 4.
Gasoline for December delivery fell 0.5 cent, or 0.4 percent, to $1.1375 a gallon in New York. Yesterday, it rose 7.82 cents, or 7.4 percent, to settle at $1.1425 a gallon, also the biggest increase since Nov. 4.
Pump prices are still dropping. Regular gasoline, averaged nationwide, dropped 2.1 cents to $1.908 a gallon, AAA, the largest U.S. motorist organization, said on its Web site yesterday. It’s the lowest price since February 2005. The fuel has tumbled 54 percent from the record $4.114 a gallon reached on July 17.
“All of the markets are intertwined right now,” said Bill O’Grady, chief markets strategist at Confluence Investment Management in St. Louis. “If equities are up, you are going to see a gain in commodities, even if there is no obvious connection. This action may restore some confidence in growth.”
President George W. Bush yesterday said he is prepared to make other financial-rescue moves like the one to help Citigroup, and that he’ll work closely with President-elect Barack Obama on all major moves to shore up the U.S. economy.
“We have made these kinds of decisions in the past, made one last night, and if need be we’re going to make these kinds of decisions to safeguard our financial system in the future,” Bush said after meeting with Treasury Secretary Henry Paulson.
Congress will send Obama an economic stimulus package the day he takes office Jan. 20, Democratic lawmakers said. Senator Charles Schumer of New York said on ABC’s “This Week” program that the package will be between $500 billion and $700 billion.
“We now are getting an idea of what the new guys plan to enact and the market is looking at it positively,” O’Grady said.
The dollar traded at $1.2953 per euro at 7 a.m. in Tokyo, after weakening 2.9 percent yesterday and 1.1 percent on Nov. 21, the biggest two-day decline this month. The U.S. currency was at 97.39 yen after rising 1.5 percent. The euro traded at 126.12 yen after gaining 4.5 percent.
Oil ministers from the 13-nation Organization of Petroleum Exporting Countries are scheduled to meet on Nov. 29 in Cairo. 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 Nov. 23.
“We are worried about the direction of prices,” Shokri Ghanem, Libya’s top oil official, said in an interview from Tripoli. “We need to see if the oil price is falling because liquidity is leaving the market or if there is too much oil in the market.”
OPEC’s decision to trim output by 1.5 million barrels a day at a meeting in Vienna last month failed to stem the decline in crude prices as the global economic slump slashed demand. The group supplies more than 40 percent of the world’s oil.
Brent crude oil for January settlement increased $4.74, or 9.6 percent, to settle at $53.93 a barrel on London’s ICE Futures Europe exchange.
Author: Jo Amey
