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Oil rose from a six-week low as investors speculated that the biggest weekly decline since September is exaggerated.
Futures gained as much as 0.5 percent after falling 1.1 percent yesterday on reports that showed U.S. industrial production shrank for the first time since April and European factory output contracted. Separate data showed better-than- expected manufacturing in the New York and Philadelphia regions and the lowest U.S. jobless claims in three years. Crude rebounded after dropping to a technical support level.
“The price gain today is just that people feel we’ve had an overreaction to the European situation,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo who says oil may trade between $90 and $100. “I’m cautiously optimistic on the U.S. With all the doom and gloom in the rest of the world, the U.S. is still doing relatively OK.”
Crude for January delivery rose as much as 48 cents to $94.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.99 at 2:19 p.m. Singapore time. The contract yesterday declined to $93.87, the lowest close since Nov. 2.
Prices are down 5.5 percent since Dec. 9, heading for a second weekly decrease and the biggest since the period ended Sept. 23. West Texas Intermediate futures are 2.9 percent higher this year after climbing 15 percent in 2010.