30 Sep 2008

Oil drops nearly 10% in price

5:58 pm on 30 September 2008

Oil prices dropped by almost 10% on Monday after the US House of Representatives rejected a $US700 billion rescue package for the financial sector.

Stocks in the United States plunged after lawmakers voted against the bailout and major US and European banks needed emergency deals to stave off collapse, sending investors fleeing to the safety of gold and debt.

US November crude settled down $US10.52 to $US96.37 a barrel. November crude dropped 11.8% last Tuesday following a spike in the expiring October crude contract in the previous session.

London Brent crude traded down $US9.56 to settle at $US93.98 a barrel.

The House voted 228-205 to reject the bailout, which would have authorised the Treasury Department to purchase broken mortgage-backed bonds from banks with the goal of jump-starting stalled capital markets.