Oil Above $89, Boosted by Stimulus Package

U.S. crude oil futures rose further to trade above $89 Thursday afternoon after details of tentative agreement for an economic stimulus package to stave off a recession reached by the White House with Congress became known.

Oil Barrels
Oil Barrels

Crude futures earlier advanced on the heels of gains in equities and commodities markets where hopes were high that an economic rescue plan would prevent recession in the U.S.

"I think (crude's gains are) primarily reflective of the stimulus package," said Eric Wittenauer, analyst at A.G. Edwards in St. Louis, Mo.

"I think that the market generally speaking is showing signs of putting in a near-term bottom around the $87 a barrel level and that report added to momentum that had pushed prices higher earlier today," he added.

Crude and gasoline advanced despite U.S. government data showing crude oil and gasoline inventories rose last week.

London Brent crude was also in positive territory.

Nymex February heating oil surged 5.64 cents or 2.33 percent to $2.4795 a gallon, trading $2.4325 to $2.56.

February RBOB was up 3.02 cents or 1.34 percent at $2.2810 a gallon, dealing from $2.2270 to $2.2885.

"The oil markets are moving up with other financial markets," said Tom Knight, trader at Truman Arnold in Texarkana, Texas.

The White House confirmed that an agreement had been reached with Congress on an economic growth package and said President George W. Bush was to make a statement later in the day.

Later, U.S. House of Representatives Speaker Nancy Pelosi said the package would include tax rebates for 117 million U.S. families.