Oil price rise after US rescue plan approval

OIL IMPACT: The $700 billion bailout approval resulted in a rise in oil prices. (Getty Images)

Oil was up $1 a barrel on Thursday after the US Senate approved a $700 billion bailout of the US financial industry, but erased earlier gains as concerns remained over weakening demand and growing supplies in the US.

The package for Wall Street, which has yet to be approved by the House of Representatives, rekindled hopes that the credit crisis can be eased, but traders and analysts said the supportive impact would be limited as eyes remained on falling demand.

US light crude for November delivery rose $1.03 to $99.56 early on Thursday, having risen as high as $100.37 before the vote. It settled down a hefty $2.11 at $98.53 on Wednesday when US government data showed supplies rising and on a firmer dollar.

London Brent was up 92 cents at $96.25.

"It should stabilize the equity markets so crude prices will get some support from it. But if demand falls off a cliff, bets are off. I think we will congest here for a while and then it is up to the economy and winter demand," said Tony Nunan, risk management executive at Tokyo-based Mitsubishi Corp.

Oil prices have tumbled from record highs above $147 a barrel in July on signs of slowing oil demand from industrial economies.

Pressure has also come as investors sell oil and other commodities and move cash into safer investments amid turmoil in financial markets.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM