SINGAPORE – Oil prices rose to almost $102 a barrel Wednesday in Asia on expectations that U.S. lawmakers will pass a revised bank bailout plan that they rejected earlier this week.
Light, sweet crude for November delivery was up $1.34 to $101.98 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. Overnight, oil rose $4.27 to settle at $100.64.
U.S. Senate leaders scheduled a vote for Wednesday on a version of the emergency bill that adds substantial tax cuts meant to appeal to Republicans when it reaches the House of Representatives. The House rejected a similar $700 billion plan Monday by a vote of 228-205.
But traders were skeptical a bailout of bad mortgage debt would quickly reverse slowing global economic growth and weakening demand for crude.
"It would be good news to avoid further turmoil, but it's too early to assume a new package would lead to a recovery in the U.S.," said Tetsu Emori, commodity markets fund manager at ASTMAZ Futures Co. in Tokyo.
A slump in energy demand has accelerated in Asia. In India, domestic oil product sales totaled 2.41 million barrels per day in August, the lowest level this year, according to Barclays Capital research. In the same month, Japan's oil demand fell by 8.4 percent.
Investors also have an eye on the weekly oil inventories report to be released later Wednesday from the U.S. Energy Department's Energy Information Administration. The petroleum supply report was expected to show that oil stocks rose as much as 1.5 million or fell as much as 1.5 million barrels, according to the average of analysts' estimates in a survey by energy information provider Platts.
The Platts survey also showed that analysts projected gasoline inventories fell between 1 million and 3 million barrels and distillates went down between 1 million and 2 million barrels last week.
"I'm pessimistic," Emori said. "I think the U.S. is already in a recession."
In other Nymex trading, heating oil futures rose 3.18 cents $2.9265 a gallon, while gasoline prices gained 3.23 cents to $2.49 a gallon. Natural gas for November delivery rose 13.2 cents to $7.57 per 1,000 cubic feet.
In London, November Brent crude rose 78 cents to $98.95 a barrel on the ICE Futures exchange.