Crude regains $1 after demand worry sell-off sees 4% slump

10 December 2008 11:10  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude rebounded more than $1/bbl on Wednesday after slumping around 4% the previous day in response to the US Energy Information Administration (EIA) projecting two consecutive years of lower global demand.

At 10:40 a.m. GMT, January NYMEX light sweet crude futures were trading at $42.95/bbl, up 88 cents/bbl on Tuesday's settlement level. Earlier the contract rose to a high of $43.49/bbl, up $1.42/bbl.

At the same time, January Brent on London's ICE futures was trading at $42.40/bbl, up 87 cents /bbl on Tuesday's settlement price. Earlier it rose to a high of $42.90/bbl, up $1.37/bbl.

Crude gained ground amid a rally in Asian stock markets which rose on hopes that government interventions such as the tentative agreement to bail out Chrysler, Ford and GM would soften the impact of the global economic crisis.

Prices had plummeted on Tuesday after the EIA said in its monthly energy outlook that it expected global oil demand to fall in both 2008 and 2009, which would be the first decline in world oil demand since 1983.

The EIA also revised down its global GDP growth forecast for 2009 to 0.5% from 1.8% in its November report.

Meanwhile, weekly US inventory data due out later on Wednesday was expected to reveal a build in crude stocks.

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By: James Dennis
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