OIL prices rose off a 3-year low, creeping above US$50 (S$76.60) a barrel on Friday in Asia as investors took a cue from a rebound in regional stock markets.
Light, sweet crude for January delivery was up 80 cents to US$50.22 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore, after falling to US$48.25 earlier in the session, the lowest level since May 18, 2005.
Opec should act to boost oil price: Libyan executive
PARIS - ACTION should be taken to halt a decline in oil prices, Libya's Opec representative told AFP on Friday, after prices slipped below US$50 (S$76) a barrel and touched three year lows.
Nevertheless, Shukri Ghanem - the head of Libya's national oil firm and its envoy to the Opec oil cartel - did not explicitly repeat his call for oil production to be cut when the organisation meets in Cairo on November 29.
The December contract, which expired Thursday, fell overnight by US$4.00 to settle at US$49.62.
'Right now, oil is just following stock market sentiment,' said Gerard Rigby, an energy analyst at Fuel First Consulting in Sydney.
Asian stock markets initially followed their US counterparts down on Friday, but then rallied. Japan's benchmark Nikkei index rose 2.7 per cent, Hong Kong's Hang Seng index gained 2.3 per cent and South Korea's key index was up 5.8 per cent.
Traders are still worried that a global recession will undermine energy demand. Already, oil prices have tumbled by two-thirds from their peak of nearly US$150 a barrel in mid-July.
The Dow Jones industrial average fell 5.6 per cent on Thursday to its lowest level since March 2003 after the Labor Department said new applications for jobless benefits exceeded analyst estimates and rose to the highest level of claims since July 1992.
The S&P 500 index fell 6.7 per cent Thursday to an 11-year low.
The S&P 500 has dropped more than 52 per cent below its October 2007 record, making this the second-biggest bear market on record, exceeded only by the 83 per cent drop between 1930 and 1932.
'US$50 was a psychological support level,' Mr Rigby said. 'Since we haven't traded this low for so long, it's hard to find a new support level.'
The Organisation of Petroleum Exporting Countries, which accounts for about 40 per cent of global supply, may cut production before its next official meeting on Dec 17, Mr Rigby said. Opec President Chakib Khelil has signaled the group may announce output reductions at the meeting, but some members, such as Iran, have called for earlier cuts.
Opec lowered production quotas by 1.5 million barrels a day last month.
'Their revenues are dropping so much, I think Opec will have to call an extraordinary meeting and cut quotas to try to support the market,' Mr Rigby said. 'Their last cut had zero impact on the market.' In other Nymex trading, gasoline futures rose 1.89 cent to US$1.03 a gallon. Heating oil gained 1.91 cents to US$1.69 a gallon while natural gas for December delivery slid 5.9 cents to US$6.26 per 1,000 cubic feet.
In London, December Brent crude fell 68 cents to US$47.40 on the ICE Futures exchange. -- AP
