COLUMBUS, Ohio - Crude futures halted a weeklong price slide Tuesday, nudging higher after Federal Reserve Chairman Ben Bernanke said the stimulus package could provide a 'significant boost' to the sinking U.S. economy.
After rebounding to a high of $50.47 one week ago, crude has fallen nearly 30 percent as a weakening global economy overshadowed Mideast tensions, OPEC production cuts, an international natural gas dispute and even predictions of an extremely cold winter.
Light, sweet crude for February delivery rose 19 cents to settle at $37.78 a barrel on the New York Mercantile Exchange after falling to $36.10 earlier, a new low for the year.
In London, February Brent crude rose $1.92 to settle at $44.83 a barrel on the ICE Futures exchange.
Oil prices rose in early trading after Federal Reserve Chairman Ben Bernanke said the $700 billion financial rescue program was needed to combat the worst financial crisis to hit the U.S. and the global economy since the 1930s.
'The incoming administration and the Congress are currently discussing a substantial fiscal package that, if enacted, could provide a significant boost to economic activity,' Bernanke said.
The comments provided a jolt to traders, said Phil Flynn at Alaron Trading Corp.
'Let's face it, we needed a vote of confidence after yesterday,' he said after prices fell 8 percent.
Flynn said traders have been hearing nothing but negative news about the economy. Traders interpreted Bernanke as saying the economy is showing signs of stabilizing.
'That's the best news an energy trader has gotten all week,' he said.
Oil reached as high as $39.50 Tuesday, but, as was the case a week ago, was unable to sustain the higher levels.
The Commerce Department said Tuesday that the trade deficit plunged to the lowest level in five years as the deepening recession slashed demand for oil.