“Everybody is waiting to see evidence that these government interventions are having a positive influence, or are at least dampening the global panic," said Toby Hassall, research analyst with Commodity Warrants Australia Pty in Sydney. “The sentiment in the market is still very poor.”
Crude oil for November delivery rose as much as $3.37, or 4.3 percent, to $81.07 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $80.83 at 8:38 a.m. in Singapore.
The contract fell $8.89, or 10.3 percent, to $77.70 a barrel on Oct. 10, the lowest settlement since Sept. 10, 2007. Prices rallied post-settlement as U.S. equity prices climbed from five-year lows late in the session.
New York oil futures dropped 17 percent last week, the biggest one-week decline since the U.S.-led invasion of Iraq in March 2003. Copper, nickel and aluminum also dropped as world equity markets plunged and the International Monetary Fund warned the world was on the cusp of recession.
Oil "looks pretty fair and reasonably priced at the moment," Commodity Warrants' Hassall said. “Markets are pricing in a global slowdown, if not a full-blown recession.”
Brent crude oil for November settlement rose $2.41, or 3.3 percent, to $76.50 a barrel on London's ICE Futures Europe Exchange. The contract slumped $8.57, or 10 percent, to $74.09 on Oct. 10, the lowest settlement since Sept. 4, 2007. The contract dropped 18 percent last week.
The International Energy Agency, an adviser to 28 nations, on Oct. 10 cut its forecast for global oil demand for 2008 to 0.5 percent, the lowest since 1993. Demand next year will rise by 700,000 barrels a day to 87.2 million, 440,000 barrels fewer than the Paris-based agency projected a month earlier.
Oil fell from a record $147.27 in New York in July as demand expectations deteriorated and the weaker outlook in Europe and Asia lifted the dollar, reducing the appeal of commodities priced in the U.S. currency.
The euro jumped the most in three weeks against the dollar today on the region's bank rescue plan and was another support for oil, Hassall said. Investors would now be looking for signs that confidence is returning to global markets, he said.
S&P 500 futures expiring in December added 37.40 points, or 4.2 percent, to 928.40 as of 9 a.m. in Tokyo after the index slid 18 percent last week, its worst drop since 1933. Australia's S&P/ASX 200 Index rose 5.5 percent to 4,180.10 after dropping 16 percent last week.
Author: Jo Amey
