LONDON, (Reuters) – Oil rose near $88 a barrel on Thursday, after a late surge in U.S. stock indices helped cool simmering fears of a recession in top energy consumer the United States.
U.S. crude CLc1 jumped 96 cents to $87.95 a barrel by 0848 GMT, after settling at a 13-week low of $86.99 in the previous session. London Brent crude LCOc1 rose 97 cents to $87.59.
“An impressive price surge at the close of Wall Street has led to a rebound in energy prices,” said Robert Laughlin of MF Global.
U.S. stocks reversed a five-day slide on Wednesday buoyed by hopes that a government-backed plan to rescue battered bond insurers would stave off a fresh round of billion-dollar writedowns.
Asian and European equity markets were higher on Thursday in response.
Oil has lost more than $3 this week. Analysts said funds and speculators had been closing out their positions in oil and commodities to cover margin calls and to finance losses in equity markets.
“At least for the next few weeks, we will be putting inventory data and the weak dollar on the backburner,” said Jim Ritterbusch, president of Ritterbusch & Associates.
A Reuters poll of analysts forecast U.S. weekly government oil inventory data to be released on Thursday would show a 2.2 million-barrel gain.
Distillates stocks were forecast to show a 100,000-barrel draw, while gasoline stocks were expected to have risen by 1.4 million barrels.
On Wednesday Qatar’s oil minister said OPEC did not need to boost output when it meets on Feb. 1 to determine production policy, and expressed concerns that demand could take a blow if a recession hit.
While U.S. oil is down almost 13 percent from the all-time peak above $100 a barrel hit on Jan. 3, prices remain up more than 60 percent from year-ago levels.