Oil prices hovered near $40 a barrel on Monday in Asia as investors weighed a massive stimulus package and a bank rescue plan from the US this week against soaring unemployment and falling demand for crude.
Light, sweet crude for March delivery rose 9 cents to $40.26 a barrel by midday in Singapore on the New York Mercantile Exchange.
The contract fell $1.00 on Friday to $40.17 a barrel after the Labor Department said the US lost 598,000 jobs in January and the unemployment rate rose to 7.6 per cent, the highest since 1992.
For all of 2008, the economy lost a net total of 2.9 million jobs, according to revised figures, marking the biggest annual loss on record.
"Considering the staggering magnitude of the jobs data, oil held up quite well," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "The downward momentum in oil pricing appears to have been broken as the $40 level has proven to be a very strong support level." Investors will be watching as a huge stimulus bill makes its way through the US legislature this week. A $827 billion stimulus package will likely pass the Senate by Tuesday, though it will have to be reconciled with a version the House of Representatives approved earlier that's about $7 billion apart in cost and overlaps in numerous ways.