( Bloomberg ) - Crude oil rose for the first day in four in New York after President George W. Bush said a package of about $150 billion is needed ``as soon as possible'' to keep the economy growing.
The Reuters/University of Michigan final index of consumer confidence climbed to 80.5, from 75.5 last month, suggesting the economy may be able to withstand rising fuel prices and declining home values. Oil has fallen from a record $100.09 a barrel earlier this month on signs growth is slowing.
``Passing a new growth package is our most pressing economic priority,'' Bush said at the White House after meeting privately with his economic advisers, including Treasury Secretary Henry Paulson. While the economic fundamentals are strong, ``there is a risk of a downturn,'' Bush said.
Crude oil for February delivery rose 44 cents, or 0.5 percent, to close at $90.57 a barrel at 2:45 p.m. on the New York Mercantile Exchange. Prices are up 79 percent from last year and are down 2.3 percent for the week.
"This market is having a very difficult time closing below $90,'' said Phil Flynn, a commodities trader for Chicago-based Alaron Trading. "If I'm a bullish trader, I'm feeling good that this market is unable to close below $90, and that's giving me hope that this market is going to rally next week.''
U.S. financial markets are closed for floor trading on Jan. 21 for the Martin Luther King Day holiday. Flynn said some traders probably didn't want to go into the long holiday weekend with ``short'' positions, especially given forecasts for cold, winter weather in much of the country. Shorts are bets prices will decline.
Brent crude for March settlement rose 48 cents, or 0.5 percent, to $89.23 a barrel on the ICE Futures Europe exchange in London. The contract yesterday declined 75 cents, or 0.8 percent, to settle at $88.75 a barrel, the lowest close since Dec. 10.
Federal Reserve Chairman Ben S. Bernanke said yesterday that the outlook for U.S. growth in 2008 ``has worsened.''
Stocks declined today on concern that the White House plan to revive the economy won't be enough to prevent a recession. The Standard & Poor's 500 Index is heading toward its biggest weekly loss in five years.
Oil ``seems to be trailing the stock indices and using them as a proxy for economic expectations going forward,'' said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.
January's rise in confidence among U.S. consumers was the first gain since July.
``The stimulus package should theoretically be bullish for demand, but in the same regard, it probably is an acknowledgement that the economy really is hurting,'' said Kyle Cooper, director of research at IAF Advisors in Houston. ``Near-term demand is probably going to be lackluster.''
Crude oil inventories rebounded last week after eight consecutive weeks of declines, as demand from U.S. refiners fell. The International Energy Agency, energy adviser to 27 nations, this week cut its forecast for global oil demand in the first quarter by 100,000 barrels a day.
``The trend is down, and every rebound, if it's not driven by specific headlines, is a temporary retracement,'' said Antoine Halff, the head of energy research at Newedge USA LLC in New York.
U.S. refiners processed 4.8 percent less oil in the week ended Jan. 11 than a week earlier, the Energy Department said Jan. 16. Tesoro Corp. reduced fuel production as profit margins narrowed, and EnergyNewsToday said Jan. 16 that Valero Energy Corp. was poised to cut low-sulfur oil processing.
Crude oil may fall next week on speculation the economic slowdown will lead to reduced fuel consumption and rising inventories.
Thirty of 41 analysts surveyed by Bloomberg News, or 73 percent, said oil prices will decline through Jan. 25, the most bearish response since Oct. 5. Four of the respondents, or 9.8 percent, said futures will increase. Seven predicted little change. Last week, 54 percent said oil would drop.