NEW YORK: Oil prices jumped about $5 to near $55 a barrel yesterday, riding the coattails of the broader market on news that the US government will bail out Citigroup. Light, sweet crude for January delivery rose more than 9 percent, or $4.65, to $54.58 a barrel on the New York Mercantile Exchange. Prices hit $55.30 at one point. In London, January Brent crude rose $4.81 to $54 on the ICE Futures exchange.
Meanwhile, US and European stocks surged in a broad relief rally yesterday. At 1 p.m., the Dow Jones Industrial Average was up 262.76 points, or 3.27 percent, at 8,309.18. The Standard & Poor’s 500 Index was up 34.68 points, or 4.33 percent, at 834.71. The Nasdaq Composite Index was up 53.79 points, or 3.89 percent, at 1,438.14.
European shares raced higher on the Citigroup bailout, with the FTSEurofirst 300 index of top European shares rising 8.9 percent to close at 828.63.
The dollar fell against a basket of major currencies, with the US Dollar Index off 1.75 percent at 85.927. Against the yen, the dollar was up 0.61 percent at 96.44.
The euro rose 2.46 percent at $1.2887.
Spot gold prices rose $25.40 to $823.90 an ounce, which analysts attributed to demand for safe assets due to fears that other banks may need to be rescued.