Source:
Bloomberg Sept. 19 (Bloomberg) -- Crude oil rose, capping the biggest three-day rally in almost a decade, on speculation government measures to resolve the bank crisis will spur the economy and bolster petroleum demand.
Oil climbed 6.8 percent today and stock markets surged after U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke said they're making plans to halt the credit-market seizure. Output disruptions from hurricanes in the U.S. and attacks in Nigeria have constrained oil supplies.
``There's a bullish lean to the market, and that will remain until the imports and inventories start to pick up,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
The October crude oil contract expires Sept. 22, and traders were buying oil to cover so-called short positions, or bets that the price will fall, said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago.
``People were waiting to cover shorts at the last minute because, really, if the Fed didn't bail us out on oil today, people could have waited until Monday,'' he said. ``We went from ultimate fear to euphoria overnight.''
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