Crude Oil Rises From 13-Month Low on Europe Bank Rescue Plan

[Purveyor]

Oct. 13 (Bloomberg) -- Crude oil rose from a 13-month low in New York on speculation action by European leaders to prevent the region's major lenders from collapsing may help slow credit market turmoil threatening to stall the global economy.

Oil gained for the first time in four days after the 15 nations using the euro agreed to shore up their banks, measures which will include the U.K. buying controlling stakes in Royal Bank of Scotland Plc and HBOS Plc. Iran, the world's fourth- biggest oil producer, will next month ask OPEC to cut output to reflect falling demand, Tehran-based newspaper Pool reported.

``Everybody is waiting to see evidence that these government interventions are having a positive influence, or are at least dampening the global panic,'' said Toby Hassall, research analyst with Commodity Warrants Australia Pty in Sydney. ``The sentiment in the market is still very poor.''

Crude oil for November delivery rose as much as $3.20, or 4.1 percent, to $80.90 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $80.40 at 7:14 a.m. in Singapore.

The contract fell $8.89, or 10.3 percent, to $77.70 a barrel on Oct. 10, the lowest settlement since Sept. 10, 2007. Prices rallied post-settlement as U.S. equity prices climbed from five-year lows late in the session.

New York oil futures dropped 17 percent last week, the biggest one-week decline since the U.S.-led invasion of Iraq in March 2003. Copper, nickel and aluminum also dropped as world equity markets plunged and the International Monetary Fund warned the world was on the cusp of recession.

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[ddeclue]

1. Fall baby fall!

We need it to go DOWN.

[dkf]

2. It will fall if people think the economy is collapsing.

Right now, that would not be a good thing.