Oil has fallen for a third consecutive day as the market awaited a bailout vote in the US House of Representatives but showed skepticism that the package would be enough to limit further oil demand falls.
The House of Representatives could vote as early as today on the revised $700 billion financial industry rescue bill that was approved by the US Senate late on Wednesday, but has failed to lift markets so far.
US light crude for November delivery fell 51 cents to $93.46 a barrel by 2.23am, having slid by a hefty $4.56 on Thursday on demand worries and a stronger dollar.
London Brent crude fell 43 cents to $90.13 a barrel.
"Traders are watching the outcome of the US House of Representatives vote on the bail-out package," Jonathan Kornafel, director Asia, Hudson Capital Energy, said in a note today.
"Unfortunately, while a "no" vote may result in a financial meltdown, a "yes" vote may cause nothing more than increased volatility across all markets," he added.
US stocks dropped 4 per cent yesterday and Asian stocks were also lower today.
The growing financial crisis has added to concerns about oil demand, which has slumped in industrialized countries like the United States this year, sending crude prices crashing from record highs over $147 a barrel hit in July.
Total US oil product demand over the past four weeks is down 7.1 per cent from a year earlier, the US Energy Information Administration's weekly data showed.
Additional pressure on crude prices came as investors - who had flocked to crude and other commodities earlier this year as a hedge against the weak dollar and inflation - unwound positions.
"In the current situation when the market is facing tightness in the money market, investors don't want to take risks in oil and other commodities markets," said Shuji Sugata, manager at Mitsubishi Corp Futures and Securities in Tokyo.
Reuters