New York: Oil rose $6 per barrel on Tuesday to over $102 as expectations that US lawmakers would pass a financial stability plan boosted global markets.
Oil and other markets had tumbled on Monday after the US House of Representatives rejected the $700 billion bailout plan. But US President George W. Bush and congressional leaders pledged to continue negotiations.
US crude traded up $6 to $102.37 in post-settlement trade, after earlier settling up $4.27 at $100.64 a barrel. On Monday, oil dropped $10.52 in the second-biggest fall since 23 April, 2003. London Brent crude traded up $4.19 to settle at $98.17 a barrel.
“I do think that Congress will pass the bailout package, possibly before this weekend,” said Mark Waggoner, president of Excel Futures.
The US dollar surged and global stocks clawed back from Wall Street’s worst day in 20 years as investors bet Washington eventually would pass the plan to stimulate credit markets and stave off a possible recession.
Oil has dropped from a record high $147.27 reached in July on signs that high energy prices and the financial crisis have cut into crude demand in the United States and other industrialized nations.
Additional pressure has come as investors - who had rushed into commodities earlier this year as a hedge against inflation and the weak dollar - sold crude for safer havens.
Signs the financial crisis was spreading to Europe could erode demand further, analysts warned.
Belgian-French financial services group Dexia is getting a $9.18 billion) capital boost from public shareholders.
Ireland offered to guarantee all bank deposits for two years to improve banks’ access to funds on international markets, helping sentiment in the equity market.
Analysts said the spread of credit problems to Europe was stoking fears the financial turmoil, which started with risky lending to the US property market, had gone global rapidly.
OPEC seaborne oil exports, excluding Angola and Ecuador, rose 50,000 barrels per day (bpd) in the four weeks to 14 September but fell sharply from Gulf producers, Lloyd’s Marine Intelligence Unit said.