Oil prices advance on demand hopes

LONDON: World oil prices rose on Monday as investors reacted to US moves to help stabilise rocky global financial markets that could encourage growth in crude demand, dealers said.

Brent North Sea crude for November delivery climbed 2.28 dollars to 101.89 dollars per barrel after stretching as high as
102.24.

New York's main contract, light sweet crude for October delivery, rallied 1.45 dollars to 106 dollars. The October contract, which earlier touched an intra-day high of 106.90 dollars a barrel, expires at the close of trade Monday.

"Oil futures were higher adding to last week's firm gains following news of the US plans to bring a halt to the turmoil in the financial markets," said Michael Davies, analyst at the Sucden brokerage in London.

"Over the weekend, the plans became clearer, with around 700 billion dollars being proposed to buy up the toxic debt that started all the financial turmoil in the first place, along with a number of other measures.

"Many are hoping that the plans, which still have to be passed by Congress, will help stabilise financial markets and rescue the US economy from further gloom, thus supporting US oil demand growth."

At the same time, the US Federal Reserve agreed Sunday to allow investment banks Goldman Sachs and Morgan Stanley to become bank holding companies, giving them easier access to credit and help them survive the current crisis.

"The stock market worldwide rebounded on Friday and this latest announcement regarding Goldman Sachs and Morgan Stanley simply also adds to the calm of global financial markets," said Victor Shum, an analyst at international energy consultancy Purvin and Gertz in Singapore.