Oil bounced $1 to above $47 a barrel today on signs that Opec members are set to make a deep supply cut when they meet later this week in an effort to prop up prices.
Rising equities and a weaker dollar also lent support to oil, which has lost $100 since its record high of over $147 in mid-July, on growing fears of slowing world appetite for energy amid a mounting global financial crisis.
US light crude for for January delivery rose $1.01 to $47.29 a barrel by 0619 GMT, having risen earlier to $47.64. The contract closed $1.70 lower on Friday after the US Senate failed to pass a bailout for automakers and Goldman Sachs predicted oil could fall to $30.
London Brent crude gained 76 cents to $47.17.
Organisation of the Petroleum Exporting Countries (Opec) ministers are in agreement on the need to cut output when they meet on Wednesday in Algeria to prop up sagging prices, Opec president Chakib Khelil said on Saturday, but declined to say by how much the organisation would cut.
Iran will propose that Opec cuts its oil output by between 1.5 and 2 million bpd, Iran's oil minister was quoted as saying yesterday.
In two meetings since early September, Opec has agreed to reduce supply by a total of two million barrels per day (bpd) but prices have continued falling.
US department of transportation figures showed on Friday US motorists drove 9 billion fewer miles in October than a year earlier, down 3.5 per cent.
China's implied oil demand shrank by about 3.5 per cent in November from the year before, the first decline in nearly three years as the giant economy brakes more sharply than expected.
Reuters