Crude oil rose for a second day in New York on the announcement by U.S. lawmakers of an economic stimulus package to avoid recession in the world's biggest energy-consuming country.
U.S. stocks staged their biggest two-day rally since November after the Bush administration and House lawmakers announced agreement on a plan to distribute rebate checks to 117 million families and give business incentives to invest in equipment. Futures markets suggest the Federal Reserve will cut rates next week, prompting the dollar to fall against the euro.
``Oil is going to track up as the U.S. dollar weakens and stock markets stabilize,'' said Rowan Menzies, a commodity market analyst at Commodity Warrants Australia Pty in Sydney. ``The feeling in the stock market is that the Fed and White House are standing ready and won't let it all collapse.''
Crude oil for March delivery rose as much as 48 cents, or 0.5 percent, to $89.89 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $89.75 at 7:37 a.m. in Singapore.
Yesterday the contract jumped $2.42, or 2.8 percent, to $89.41, the biggest one-day gain since Jan. 2, after closing the previous day at the lowest since Oct. 23. Futures reached a record $100.09 a barrel on Jan. 3. Prices are up 65 percent from a year ago.
U.S. stocks staged their biggest two-day rally since November after the Bush administration and House lawmakers announced agreement on a plan to distribute rebate checks to 117 million families and give business incentives to invest in equipment. Futures markets suggest the Federal Reserve will cut rates next week, prompting the dollar to fall against the euro.
``Oil is going to track up as the U.S. dollar weakens and stock markets stabilize,'' said Rowan Menzies, a commodity market analyst at Commodity Warrants Australia Pty in Sydney. ``The feeling in the stock market is that the Fed and White House are standing ready and won't let it all collapse.''
Crude oil for March delivery rose as much as 48 cents, or 0.5 percent, to $89.89 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $89.75 at 7:37 a.m. in Singapore.
Yesterday the contract jumped $2.42, or 2.8 percent, to $89.41, the biggest one-day gain since Jan. 2, after closing the previous day at the lowest since Oct. 23. Futures reached a record $100.09 a barrel on Jan. 3. Prices are up 65 percent from a year ago.
Gold and silver rose and platinum jumped to a record yesterday because of the falling dollar. The U.S. currency has dropped more than 5 percent against the euro since the Fed lowered the overnight lending rate on Sept. 18.
Stockpiles Rise
U.S. crude-oil inventories rose 2.3 million barrels to 289.4 million in the week ended Jan. 18, the Energy Department said in a report yesterday. Gasoline supplies increased 5.1 million barrels to 220.3 million barrels, the biggest gain since December 2006, the report showed.
``The failure to drop after the significant build in gasoline supplies and the larger-than-expected seasonal build in crude oil is a sign that the market is looking to find a bottom,'' said Eric Wittenauer, an analyst at A.G. Edwards & Sons Inc. in St. Louis.
Brent crude for March settlement yesterday rose $2.45, or 2.8 percent, to close at $89.07 a barrel on London's ICE Futures Europe exchange. Brent touched a record $98.50 on Jan. 3.
Stockpiles Rise
U.S. crude-oil inventories rose 2.3 million barrels to 289.4 million in the week ended Jan. 18, the Energy Department said in a report yesterday. Gasoline supplies increased 5.1 million barrels to 220.3 million barrels, the biggest gain since December 2006, the report showed.
``The failure to drop after the significant build in gasoline supplies and the larger-than-expected seasonal build in crude oil is a sign that the market is looking to find a bottom,'' said Eric Wittenauer, an analyst at A.G. Edwards & Sons Inc. in St. Louis.
Brent crude for March settlement yesterday rose $2.45, or 2.8 percent, to close at $89.07 a barrel on London's ICE Futures Europe exchange. Brent touched a record $98.50 on Jan. 3.
By Angela Macdonald-Smith
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