Oil rose to above $51 a barrel this morning, after a near 7 per cent fall the previous day, when data showed the US economy last shrank at its fastest pace in seven years, reflecting slowing demand in the world's largest oil consumer.
A new $800 billion Federal Reserve rescue package helped US stock markers Dow and S&P 500 achieve their first three-day run since the summer last night after oil settled, but failed so far to lift oil prices.
US light crude for January delivery rose 45 cents to $51.22 a barrel by 6.05am, having settled down $3.73 at $50.77 today after two-day gains of nearly 10 per cent.
Oil prices have failed to post three consecutive days of gains since September.
London Brent crude rose 43 cents to $50.78.
"Concerns about weakening oil consumption remain a key negative for the oil price," said David Moore, commodity strategist from the Commonwealth Bank of Australia, in a daily note.
Revised US Commerce Department data showed yesterday third-quarter US gross domestic product dropped 0.5 per cent against a year earlier, the sharpest fall since the third quarter of 2001.
Consumers spending, which accounts for two-thirds of economic activity in the US, fell to a 28-year low.
Slowing demand and recession concerns have knocked oil from its record peak above $147 a barrel in July, prompting members of the Organization of Petroleum Exporting Countries to call for further supply reductions to support prices.
OPEC ministers next gather in Cairo on November 29th for a consultative session, with the organisation's next policy-setting meeting in Algeria on December 17th.
Price hawk Iran yesterday said non-OPEC states should cooperate with OPEC in stabilising the oil market because, if the group acts alone, prices will continue to fall.
OPEC members Iran and Venezuela have called on the cartel to cut production by at least another 1 million barrels per day, after last month's 1.5 million bpd cut failed to lift prices.
Reuters