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Oil falls below $108 as traders mull bailout plan

Associated Press Modified: September 24, 2008 at 2:05 pm •  Published: September 23, 2008

Congressional aides said the House could act on a bailout bill as early as Wednesday, but leaders emerged from a closed-door meeting late Monday with no firm timetable for action.

Concerns that the cost of the bailout could escalate helped push down the dollar Monday. Investors often buy crude futures as a hedge against a weakening dollar and inflation. The 15-nation euro fell Tuesday to $1.4725 from $1.4804 on Monday. The dollar rose slightly to 105.75 yen.

OPEC's decision earlier this month to cut production by 520,000 barrels a day and output shutdowns and damage to oil installations on the Gulf of Mexico coast caused by Hurricane Ike and Gustav have helped spark the jump in oil prices from $90 a barrel last week.

"Those factors are coming back to the fore. They were glossed over a bit by the crisis in financial markets," Burg said. "Crude oil supplies are quite tight at present."

In other Nymex trading, heating oil futures fell 1.8 cents to $3.025 a gallon, while gasoline prices rose 0.12 cent to $2.705 a gallon. Natural gas for October delivery rose 7.6 cents to $7.734 per 1,000 cubic feet.

In London, November Brent crude fell $1.69 to $104.35 a barrel on the ICE Futures exchange.

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