LONDON — Oil prices dropped Thursday as the market refocused on data revealing a jump in American crude stockpiles, after a brief rally in response to the U.S. Senate’s approval of a revised financial bailout. London’s Brent North Sea crude for delivery in November dropped US$1.24 to 94.08 a barrel. New York’s main contract, light sweet crude for November, fell 95 cents to US$97.58 a barrel. Brent oil had already slumped by almost US$3 Wednesday on news of a surprise jump in crude inventories in the United States, the world’s biggest consumer of energy. “Crude prices have been extremely volatile,” said Dresdner Kleinwort analyst Gareth Lewis-Davies. “Increased risk aversion and price volatility — the latter in part due to lower participation — may be currently feeding off each other, leading to the prospect of continuing oil price volatility while the prospect for all markets remain highly uncertain,” he added. The U.S. Department of Energy (DoE) said Wednesday that American crude stockpiles rose 4.3 million barrels in the week ending September 26, surprising a market which had been expecting a fall of around 1.7 million barrels. The DoE said gasoline (petrol) stockpiles increased by 900,000 barrels. “This week’s data release was overall bearish for prices,” said Lewis-Davies. Oil prices had rebounded slightly in Asian trading on Thursday after the U.S. Senate late on Wednesday approved a bill to purchase up to US$700 billion worth of tainted mortgage-related assets at the root of a global financial crisis. Now the bill must be passed by the House of Representatives. “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 U.S. economy,” said Victor Shum of the Purvin and Gertz energy consultancy. “All of these things should help the economic outlook and hence oil demand,” he said in Singapore.
U.S. President George W. Bush welcomed passage of the bill and called on the House of Representatives to act in the next two days to avoid further damage to the U.S. 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.