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.
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