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NEW YORK - Oil rose yesterday after central banks injected cash into the global financial system and markets eyed tropical depressions stirring in the Atlantic basin.
US crude futures settled up 15c at US$71.62 a barrel, after trading as high as US$73.19 earlier. London's Brent crude fell 16c to US$70.23 a barrel.
"The meltdown in global equities seems to have now stabilised - it has given the bulls a little more confidence," said Stephen Schork, president of the Schork Report.
The US Federal Reserve, the Bank of Japan and the European Central Bank pumped more cash into banking systems, raising investor confidence and enhancing the allure of stocks hit by worsening lending conditions.
The credit squeeze in financial markets, triggered by problems in the US sub-prime mortgage market, sparked widespread selling across assets including oil, helping to send US crude prices down from a record high of US$78.77 on August 1.
Some analysts have forecast supplies could have trouble keeping up with demand growth later this year unless producer group Opec ramps up production when it meets in September.
"The recent price declines driven by the liquidation of speculative positions will prove to be short-lived," Goldman Sachs analysts said. "We believe that the current market represents a buying opportunity."
The International Energy Agency has said world oil demand would grow at a faster pace in 2008.
Oil markets were also watching two tropical depressions, in the Atlantic and Gulf of Mexico, for signs they could disrupt regional energy facilities.
- Reuters
