Oil climbed above $88 a barrel today after a rebound in world equity markets helped cool fears of a recession in top energy consumer the United States.
US crude jumped $1.43 to $88.42 a barrel by noon after settling at a 13-week low of $86.99 in the previous session. London Brent crude rose $1.46 to $88.08.
Investors poured back into equities today, hoping a rescue plan for ailing bond issuers would stem credit losses. European and Asian stock markets rose sharply, taking their cue from overnight gains on Wall Street.
Traders will focus their attention later on Thursday to the release of weekly US inventory data, delayed a day due to the US holiday.
Distillates were forecast to show a 100,000-barrel draw, while gasoline supplies were expected to have risen by 1.4 million barrels.
Oil has lost more than $3 this week. Analysts said funds and speculators had been closing out their positions in oil and commodities to cover margin calls and to finance losses in equity markets.
The International Energy Agency's executive director expressed concern about the strength of the world economy and said oil producers could help the situation by pumping more.
On Wednesday, Qatar's oil minister said Opec did not need to boost output when it meets on February 1st to determine production policy, however, and expressed concerns that demand could take a blow if a recession hit.
While US oil is down almost 13 per cent from the all-time peak above $100 a barrel hit on January 3rd, prices are up more than 60 per cent from year-ago levels.