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Oil rebounded above US$94 a barrel yesterday after two days of losses as traders took heart from signals that the Federal Reserve could cut interest rates aggressively this month to cushion the economy from recession.
US light crude for February delivery rose US56c by mid-afternoon to US$94.26 a barrel, recouping some of Thursday's US$1.96 decline. Crude hit a record high of US$100.09 a barrel on January 3.
US Federal Reserve chairman Ben Bernanke said on Thursday the central bank was ready to take "substantial" measures to shore up the economy, raising expectations for a half-point interest rate cut, rather than a quarter point, at the Fed's January 29-30 meeting.
The Fed has already cut rates a full percentage point since September. The euro rose nearly 1 per cent on Thursday.
- Reuters
