Oil prices recover slightly after steep drop

by Babel-Fish | October 7, 2008 at 03:29 pm

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The small stock market crash mainly caused by hype, rumor and panic see a drop in oil prices this was was caused by stocks being sold and nothing to do with supply and delivery or president Bush lifting a ban on drilling.

NEW YORK - Oil prices swung higher Tuesday, snapping a four-day plunge as investors temporarily halted their frantic selling to see whether the government's sweeping economic bailout can stem a widening global downturn.

Light, sweet crude for November delivery rose $2.25 to settle at $90.06 a barrel on the New York Mercantile Exchange, after earlier trading as high as $93.02.

Prices had lost nearly $13 in the past four trading sessions as a widening economic crisis spreads overseas and undercuts energy demand forecasts.

Despite Tuesday's modest advance, analysts said crude's fundamentals suggest prices are headed lower.

"We've just seen a huge shift in sentiment where the focus isn't on supply anymore. It's on demand, and that demand continues to weaken," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.