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Oil rises slightly after sharp drop overnight

business Updated: Dec 19, 2008 10:10 IST

Oil prices rose slightly on Friday in Asia after a sharp decline overnight as investors mulled how much the global economic slowdown will dampen crude demand.

Light, sweet crude for February delivery was up 73 cents to $42.40 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract overnight fell $2.94 to settle at $41.67.

The January contract, which expires on Friday, fell $3.84 overnight to settle at $36.22 after dropping as low as $35.98, levels last seen in June 2004.

Investors have been discouraged by a stream of dismal economic news, highlighted by a string of company layoffs. Bristol-Myers Squibb Co, International Paper Co, Bank of America Corp, Western Digital Corp, Aetna Inc, and Newell Rubbermaid Inc, all announced mass job cuts in the past week. The Dow Jones industrial average fell 2.5 per cent on Thursday. "Every time you see the news _ about China, the US, Europe _ it's negative," said Clarence Chu, a trader with market-maker Hudson Capital Energy in Singapore.