Dec. 2 (Bloomberg) -- Crude oil rose, rebounding from a three-year low, as equities climbed on speculation that central banks will increase efforts to end the recession in the U.S., Europe and Japan.

Oil rose as much as 1.9 percent because falling producer prices are giving the European Central Bank more room to cut interest rates and as Federal Reserve Chairman Ben S. Bernanke said he may use less-conventional methods to revive the economy. A falling dollar today is increasing the appeal of commodities.

“We are being pulled higher by stocks, which are up on the potential of a European interest-rate cut,” said Tom Bentz, senior energy analyst at BNP Paribas in New York. “The dollar is down as well, which is giving the market some additional strength.”

Crude oil for January delivery rose 64 cents, or 1.3 percent, to $49.92 a barrel at 9:26 a.m. on the New York Mercantile Exchange. Futures touched $47.36, the lowest since May 20, 2005. Oil prices have tumbled 66 percent since reaching a record $147.27 on July 11.

“When you’ve gone so far down and make a new low, a bounce is to be expected,” said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut. “The trend is still lower but I think going forward it will be more of a slow grind.”

Brent crude oil for January settlement increased 78 cents, or 1.5 percent, to $48.69 a barrel on London’s ICE Futures Europe exchange. Futures touched $46.02, the lowest since Feb. 18, 2005.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

Last Updated: December 2, 2008 09:39 EST