Oil falls after US bailout deal
Tuesday, 30 September 2008
SINGAPORE, Sept 29(AFP): World oil prices fell in Asian trade today after US policy- makers outlined a 700 billion dollar government bailout of the financial sector, dealers said.
In afternoon trade New York's main contract, light sweet crude for November delivery, fell 1.80 dollars to 105.09 dollars per barrel from 106.89 at the close of floor trading on the New York Mercantile Exchange Friday.
Brent North Sea crude for November delivery dropped 1.64 dollars to 101.90.
On Sunday US lawmakers struck a deal on draft legislation for a bailout of struggling Wall Street banks hit by the worst financial crisis since the Great Depression of the 1930s. A vote could come as early as Monday.
Victor Shum, an analyst with energy consultancy Purvin and Gertz, said the deal would offer only short-term relief for investors worried about the impact of the financial crisis on energy demand in the world's biggest oil user.
"It looks like it has got agreement from both the Democrats and the Republicans," Shum said in Singapore.
"However, there are still a lot of worries about the depth and length of the economic impact of this crisis... These worries will weigh on prices," he said.
Oil prices have dropped sharply from record high levels above 147 dollars in July on worries that demand is shrinking in a US- led global slowdown.
The rescue package includes the immediate release of 250 billion dollars to enable the government to buy up troubled assets at the root of the crisis.
In the bill, the president is authorised to approve a further 100 billion dollars, but the plan gives Congress a veto power over purchases above that limit and sets a ceiling for all purchases of 700 billion dollars.
In afternoon trade New York's main contract, light sweet crude for November delivery, fell 1.80 dollars to 105.09 dollars per barrel from 106.89 at the close of floor trading on the New York Mercantile Exchange Friday.
Brent North Sea crude for November delivery dropped 1.64 dollars to 101.90.
On Sunday US lawmakers struck a deal on draft legislation for a bailout of struggling Wall Street banks hit by the worst financial crisis since the Great Depression of the 1930s. A vote could come as early as Monday.
Victor Shum, an analyst with energy consultancy Purvin and Gertz, said the deal would offer only short-term relief for investors worried about the impact of the financial crisis on energy demand in the world's biggest oil user.
"It looks like it has got agreement from both the Democrats and the Republicans," Shum said in Singapore.
"However, there are still a lot of worries about the depth and length of the economic impact of this crisis... These worries will weigh on prices," he said.
Oil prices have dropped sharply from record high levels above 147 dollars in July on worries that demand is shrinking in a US- led global slowdown.
The rescue package includes the immediate release of 250 billion dollars to enable the government to buy up troubled assets at the root of the crisis.
In the bill, the president is authorised to approve a further 100 billion dollars, but the plan gives Congress a veto power over purchases above that limit and sets a ceiling for all purchases of 700 billion dollars.