Commodity Daily News

Crude Rises as US Senate Approves the Rescue Package.

The Senate approved the $700 billion financial-rescue package. This news revived the market and caused the price of Crude Oil to rise to $100.37 a barrel in after-hours trading on the New York Mercantile Exchange. A feeling of some stabilization is dominating the market once the bill was passed. This bill is aimed at limiting a slowdown of economic growth in the world's biggest energy-consuming nation, which removed some of the uncertainty and restored some hope that the economy will be improved. As a result, Crude prices went up. However, prices are still highly volatile since there isn't enough demand in the market for Crude and the economic recovery following the passage of the bailout plan is still expected to take place.


Nevertheless, despite the fact that many hopes were associated with the bailout vote, it failed to lift the market significantly so far. The supportive impact of the rescue bill is still quite limited as falling demand for Oil prevails on the market. As a result of the financial turmoil in the markets, investors sell Oil as well as other commodities and move cash into safer investments which may put pressure on Crude prices.


Even though the bill was approved by the Congress, it is still unknown whether it will do anything positive for the market, or for Crude Oil. The measure now goes to the U.S. House of Representatives for a vote that is likely to take place on Friday. Investors are nervous whether the House of Representatives will also approve the sweeping rescue plan after its rejection at the start of the week. While such uncertainty continues to hover over the market, very few investors are willing to take big risks in this volatile environment.