27 Sep 2008

Oil rises $US2 on US bailout hopes

7:35 am on 27 September 2008

Oil rose in price by more than $US2 on Thursday as American lawmakers hammered out a $US700 billion agreement to rescue the banking sector.

US crude traded up $US2.23 at $US107.96 a barrel by 1833 GMT, while London Brent crude rose $US2.13 to $US104.58 a barrel.

A US government report issued on Wednesday showed demand in the United States over the past four weeks was 5.3% below last year, due to high fuel costs and the wider economic crisis.

US gasoline inventories are at their lowest since 1967, according to the Department of Energy.

Crude oil prices previously reached a record $US147.27 on 11 July.