Oil hovers over $77/barrel

Crude oil traded near $77 a barrel after rising yesterday as traders bought back futures contracts amid speculation credit losses in Dubai won’t derail the global economic recovery, Bloomberg reported.

Oil advanced 1.6 percent yesterday after the Institute for Supply Management-Chicago Inc. said its business barometer climbed to 56.1, the highest level since August 2008.

China’s manufacturing growth held at the fastest pace in 18 months in November, aiding the rebound of the world’s third-largest economy, according to a report today.

Crude oil for January delivery was at $77.19 a barrel, down 9 cents, in electronic trading on the New York Mercantile Exchange at 1:30 p.m. Singapore time. Yesterday, the contract increased $1.23 to settle at $77.28 a barrel.

Futures have gained 73 percent this year after losing 54 percent in 2008.

Oil traded near $78 a barrel on Nov. 25 before Dubai World, one of the emirate’s three largest state-linked holding companies, sought to delay payments on its debt and other liabilities.

The company has since begun what it described as “constructive” talks with banks to restructure $26 billion, less than half of its $59 billion in obligations.

Brent crude oil for January settlement on the London-based ICE Futures Europe exchange traded at $78.50 a barrel, up 3 cents, at 1:30 p.m. in Singapore. Yesterday, the contract rose 1.7 percent to $78.47 barrel, the highest since Nov. 18.