Oil prices slightly higher

SINGAPORE: Oil prices edged higher in Asian trade Thursday as investors worried a stalemate over the US government's bailout plan for the ailing financial system will further damage the economy, dealers said. New York's main contract, light sweet crude for November delivery, rose 19 cents to 105.92 dollars a barrel.

Brent North Sea crude for November delivery was 16 cents higher at 102.61. Dealers said investor fears could be stoked by a failure of the US Congress to approve the proposed 700-billion-dollar plan to buy tainted mortgage-related assets at the root of the global financial crisis.

President George W. Bush warned the "entire US economy is in danger" and tried to pressure lawmakers who have shown opposition to what is in effect a taxpayer bailout. "Without immediate action by Congress, America could slip into a financial panic," Bush said in a rare live televised speech to the nation. "Ultimately, our country could experience a long and painful recession."

Congressional approval of the plan would at least bring some calm to the market, said Tony Nunan, a Tokyo-based manager with Mitsubishi Corp's international petroleum business. Oil prices have experienced recent volatility and on Monday the benchmark New York contract made its biggest one-day leap ever, soaring 16.37 dollars a barrel to 120.92 before falling again.

"It will at least stabilise prices. If we can stabilise the economy, the market may, and I think will, refocus on the supply-side problem," he said. "We still have supply-side problems," Nunan said, referring to low oil reserves in the US.

The US Department of Energy's weekly report showed crude oil stocks fell by 1.5 million barrels in the week to September 19. US gasoline reserves fell for the ninth consecutive week, by 5.9 million barrels, while distillates -- diesel fuel and heating oil -- dropped by 4.2 million barrels.

Bart Melek of BMO Capital Markets said: "It's essentially a demand story." Although the inventory numbers were "fairly bullish," he said, "the market is worried about demand longer term." Oil prices have already fallen heavily from record levels above 147 dollars in early July on worries the global economy is slowing and causing a dent in energy demand.