After plummeting for four consecutive days, oil prices have risen by over two dollars to US$90.06 a barrel on the New York Mercantile Exchange. Forecast to plunge further, oil prices have risen as investors have taken a brief halt from a selling frenzy to review the possibility of a global revival after the US government's sweeping economic bailout. Tensions were alleviated after the Federal Reserve announced an emergency plan to buy up massive amounts of companies' short-term debt in its latest effort to unclog jammed credit markets. Oil prices have plummeted by 13 dollars in the past 4 sessions as the amplifying economic crisis seems to have spread across continents, challenging energy demand forecasts.
The focus has shifted from supply concerns to deteriorating global demand. Meanwhile, investors are looking for indications from OPEC that it may cut production if prices fall further. But OPEC members could be unenthusiastic to reduce output since higher gasoline and heating costs would be a further drag on economic growth. Also adding to pressures on oil prices is a stronger dollar, as investors tend to buy commodities like oil to defend against dollar weakness and a hedge against inflation, but sell crude as the U.S. currency strengthens.
In London, November Brent crude rose 98 cents to settle at $84.66 per barrel on the ICE Futures exchange.
08-Oct-08 
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