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Oil prices rise above USD 50 on Obama economy team

business Updated: Nov 24, 2008 11:15 IST

AP
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Oil prices rose above USD 50 a barrel on Monday in Asia as investors gained some confidence from reports that US 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 USD 50.30 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The January contract on Friday rose 51 cents to settle at USD 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 Governor Bill Richardson as commerce secretary helped boost US stocks.

The Dow Jones industrial average rose 6.5 per cent on Friday but Asian markets on Monday were mostly lower with Hong Kong's Hang Seng index down 1.5 per cent and South Korea's Kospi down 2.4 per cent.

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 US 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.