Oil bounces with stock market
Oil prices rose more than $1 Tuesday, tracking a bounce on Wall Street after U.S. Federal Reserve Chairman Ben Bernanke said he was committed to protecting the troubled banking sector.
U.S. crude oil rose $1.52 to end the day at $39.96 a barrel.
The gains came as U.S. stocks jumped more than 2%, bouncing off of 12-year lows hit Monday, after Bernanke told U.S. lawmakers that he was committed to ensuring the economic viability of banks.
Uncertainty about the future of the U.S. banking system has raised concerns the economic crisis could worsen, darkening an already gloomy outlook for U.S. energy demand.
Buying in the oil markets was encouraged by figures showing stronger-than-expected OPEC compliance with its production cuts. Energy consultant Petrologistics said this week that OPEC producers were likely to pump less oil in February than January and a Reuters calculation based on the figures showed the cartel’s compliance to its supply cut agreements was 89% guaranteed high risk personal loans.
"The OPEC compliance was bigger than expected," said Oliver Jakob with Petromatrix.
OPEC members are scheduled to meet March 15 in Vienna and are expected to consider deepening their output cuts.
Oil’s gains Tuesday were limited by U.S. reports showing consumer confidence plunging to a record low in February while U.S. home prices fell at a record pace.
Oil prices have dropped nearly $110 a barrel from their peak in July last year as the economic crisis cuts into global energy demand.
Oil traders are eyeing U.S. oil inventory data Wednesday, which is likely to show a 1-million-barrel increase in crude stocks last week, a preliminary Reuters poll showed.