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Oil prices higher after US Senate vote

World oil prices gained in Asian trade on Thursday with market sentiment lifted after the US Senate approved a revised government proposal to bail out the US financial sector, analysts said.

business Updated: Oct 02, 2008 09:16 IST

World oil prices gained in Asian trade on Thursday with market sentiment lifted after the US Senate approved a revised government proposal to bail out the US financial sector, analysts said.

New York's main contract, light sweet crude for November delivery, was 1.05 dollars higher at 99.58 dollars a barrel from 98.53 at the close of floor trading Wednesday on the New York Mercantile Exchange.

Brent North Sea crude for November delivery gained 86 cents a barrel to 96.19 from 95.33 dollars on Wednesday in London.

"The rescue plan is essentially going to be a confidence booster and hopefully it will also have some real impact on improving the state of the US economy," said Victor Shum of Purvin and Gertz energy consultancy.

"All of these things should help the economic outlook and hence oil demand and so the price of oil has therefore edged up this morning," he said in Singapore.

After the Senate's approval, the bill to purchase up to 700 billion US dollars worth of tainted mortgage-related assets at the root of a global financial crisis faces a vote in the House of Representatives.

President George W Bush welcomed passage of the bill and called on the House to act in the next two days to avoid further damage to the US economy.

"The American people expect and our economy demands that the House pass this good bill this week and send it to my desk," Bush said.

Treasury Secretary Henry Paulson also urged the House to "act promptly to pass the bill."

Analysts have said collapse of the plan would further heighten worries of an even sharper slowdown in the already weak US economy, a major buyer of the world's exports.

Dariusz Kowalczyk, chief investyst Nimit Khamar, commenting ahead of the Senate vote, said the bailout plan would not provide a quick solution to the credit crunch.

"I will take some time before energy demand picks up again and on the evidence of data seen recently. It appears the demand outlook is continuing to deteriorate."