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London: Oil climbed above $88 a barrel yesterday after a rebound in world equity markets helped cool simmering fears of a recession in top energy consumer the US.
US crude jumped $1.43 to $88.42 a barrel by 1200 GMT, after settling at a 13-week low of $86.99 in the previous session. London Brent crude rose $1.46 to $88.08.
"An impressive price surge at the close of Wall Street has led to a rebound in energy prices," said Robert Laughlin of MF Global.
Investors poured back into equities yesterday, hoping a rescue plan for ailing bond issuers would stem credit losses. European and Asian stock markets rose sharply, taking their cue from overnight gains on Wall Street.
Domestic crude stocks were expected to have increased 2.2 million barrels last week, a Reuters poll of analysts predicted.
Distillates were forecast to show a 100,000-barrel draw, while gasoline supplies were expected to have risen by 1.4 million barrels.
"With the release of the [EIA] statistics, it will be the first time in more than a week that oil traders will have the chance to focus on something else than the Dow," said Olivier Jakob of Petromatrix.
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