Oil Prices Rise Above $50 on Obama Economy Team
Oil prices rose above $50 a barrel Monday in Asia as investors gained some confidence from reports that U.S. President-elect Barack Obama has chosen an economic team to tackle what could be the worst slowdown in decades.
Light, sweet crude for January delivery was up 37 cents to $50.30 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The January contract Friday rose 51 cents to settle at $49.93.
News that Obama plans to name New York Federal Reserve Bank President Timothy Geithner as treasury secretary, Lawrence Summers as director of the National Economic Council and New Mexico Gov. Bill Richardson as commerce secretary helped boost U.S. stocks.
The Dow Jones industrial average rose 6.5 percent Friday but Asian markets on Monday were mostly lower with Hong Kong’s Hang Seng index down 1.5 percent and South Korea’s Kospi down 2.4 percent.
Oil futures have followed stock markets recently, using equities as a proxy for economic outlook and investor sentiment.
“The lack of clarity as to who exactly is in charge of steering the U.S. economy is really hurting the equity markets,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “So putting together the new team gives a bit of a reassurance to the market, even if Obama isn’t president yet.”
Obama will be sworn in on January 20.
Article continues… Int’l Herald Tribune
About the Author
Samuel R. Avro is the founder and Editor-In-Chief of Consumer Energy Report. Sam believes that a lot more can be done about the energy problem the world is currently facing. First and foremost, the public must be made aware of all the available options. He firmly believes that the most realistic method of achieving this on a large-scale basis is to report the news for the public to read and discuss. When he isn't too busy covering the energy industry, as a New York area resident, Sam is always willing to take part in a discussion about his World Champion New York Yankees. Motto: Dissemination of information is the key!
