NEW YORK ( TheStreet) -- Oil prices were rallying Friday as market morale improved going into the weekend, when leaders will discuss how to expand the European rescue fund. However, lingering fears threatened to erode risk appetite.
West Texas Intermediate (WTI) light sweet crude oil for December delivery was gaining $2.58 to $88.65 a barrel and the December Brent crude contract was adding $1.81 to $111.57, as the dollar fell 0.6% against the euro and the Dow gained more than 200 points, and the S&P 500 gained more than 20 points.
There's been almost a 96% correlation between crude oil futures and the stock market over the last several months, and on a day-to-day basis, oil traders are often using the S&P 500 as a barometer for where oil prices might be going next. For instance, an S&P 500 bottom of 1070 corresponds with WTI crude at around $75 and Brent at around $99.
"People are feeling more optimism today," says Channing Smith, co-manager at the five-star Capital Advisors Growth Fund. But "it will be interesting to see if it holds through the end of the day."Eurozone leaders are faced with an intensely complex and challenging task of coming together with a comprehensive plan for preventing the region from sliding into a recession -- and time is running out. "The situation far exceeds what we had to deal with in 2008," said Smith of the eurozone's debt crisis. "We keep telling clients this isn't going to be solved in couple days.
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