Oil rose towards $53 a barrel today, continuing its fifth week of gains, bolstered by expectations that the US Treasury's efforts to stabilise the ailing financial system could speed up a recovery of the US economy.
The US Treasury Department said secretary Timothy Geithner will hold a briefing at 8:45 a.m. (1245 GMT) today to talk about wide-ranging efforts to stabilise the financial system through pumping cash into faltering banks and other attempts to increase lending.
US light crude for May delivery rose 65 cents to $52.72 a barrel by 0558 GMT, while London Brent crude rose 68 cents to $51.90.
The United States today offered generous financing for private investors to help cleanse banks of up to $1 trillion in toxic assets that are blocking lending and worsening a deep US recession.
The announcement lifted Asian stocks with Japan's Nikkei at a one-month high.
Weakness in the US dollar also offered support to oil prices. The dollar rebounded on Friday but still recorded its biggest weekly slide since 1985 as the Federal Reserve's plans to buy long-term government debt stoked fear about the erosion of the US currency.
President Barack Obama said yesterday the US dollar is still strong but warned that excessive borrowing and high deficits could weaken Treasury bill demand.
Crude has fallen nearly $100 from highs above $147 a barrel last July, as the global economic crash has shrunk demand for the fuel.
But Opec's curbs on output by 4.2 million barrels per day (bpd) and efforts by the US government to revive the economy have helped oil prices to stabilise at between $40-$50 a barrel, after falling to levels below $35 last month.
Still, analysts cautioned that near-term demand for oil remains weak and crude's recent rally may be limited.
The global economy is set to shrink by 1 to 2 per cent this year, World Bank president Robert Zoellick said on Saturday, saying the depth of the slowdown was unprecedented since the 1930s Great Depression.
In a further sign of weakening demand, crude imports into China, the world's No. 2 oil consumer, fell 18 per cent from a year ago in February, customs data showed.
Reuters