Crude rose from a six-week low in New York as investors bet that the biggest weekly decline in almost three months is exaggerated.
Futures gained as much as 1 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. The dollar weakened against most of its major counterparts, buoying demand for commodities.
“Commodities markets are trying to rebound from the violent, aggressive selling that swamped them earlier this week and going into a Friday bounce,” Dennis Gartman, an economist, said today in his daily Gartman Letter.
Crude for January delivery rose as much as 92 cents to $94.79 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.31 at 1:46 p.m. in London. The contract yesterday declined to $93.87, the lowest close since Nov. 2.
Prices are down 4.6 percent this week, heading for a second weekly drop and the biggest since the period ended Sept. 23. West Texas Intermediate futures are 3.2 percent higher this year after climbing 15 percent in 2010.
Brent oil for February settlement was at $104.31 a barrel, up 71 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate for the same month was at $9.78, compared with a record $27.88 on Oct. 14.
Manufacturing in the New York region expanded the most in seven months in December, the Federal Reserve Bank of New York’s general economic index showed yesterday. The Federal Reserve Bank of Philadelphia’s general economic index increased to 10.3, compared with a median estimate of 5 in a Bloomberg survey. Jobless claims last week were the lowest since May 2008, according to Labor Department data.
The U.S. was the world’s biggest oil-consuming nation last year, accounting for 21 percent of demand, according to BP Plc’s Statistical Review of World Energy.