Crude oil markets in Asia saw mixed reactions as investors reacted to steps taken by the US to help investment banks Goldman Sachs and Morgan Stanley survive a financial crisis. New York's main contract, light sweet crude for October delivery dipped marginally to US$104.5 a barrel, Brent North Sea crude rose to US$100.16. The US Federal Reserve's board had approved "the applications of Goldman Sachs and Morgan Stanley to become bank holding companies" and authorised the Federal Reserve Bank of New York "to extend credit" to the two firms. The extraordinary Sunday announcement places the last two independent Wall Street investment banks under supervision by bank regulators and opens a wider range of credit to the two firms. It follows the meltdown on Wall Street that saw the collapse of investment bank Lehman Brothers, the merger of Merrill Lynch with Bank of America, and the government bailout of insurance giant AIG.
Oil rose 7% to touch US$105.25 a barrel, the highest since Sept. 9 after US Treasury Secretary and Federal Reserve Chairman indicated that they are making plans to halt the credit-market seizure. Oil prices are ikely remain volatile in the short term while investors wait for more details of the US government's unprecedented US$700 bln financial rescue plan for the economy. The government plans to buy up mortgage-related assets at the root of a global financial crisis.
22-Sep-08 
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