Crude-oil futures dropped Friday on concerns that a U.S. bailout of financial firms wouldn't be enough to reverse declining oil demand. Light, sweet crude for November delivery settled $1.13, or 1%, lower at $106.89 a barrel on the New York Mercantile Exchange.Oil futures, like other commodity and currency markets, were in limbo Friday as traders waited for congressional leaders and President George W. Bush to settle on a final bailout package for troubled financial firms. Investors see the $700 billion plan as the best hope of avoiding a full economic meltdown, a fear punctuated by the seizure of Washington Mutual Inc. by regulators.
Traders nervously bid crude lower in the absence of a deal, though few were willing to take bets on a big price move in either direction. "The prospect that a deal gets done helped support the market," said Andy Lebow, senior vice president for energy at brokerage MF Global Ltd. in New York. "It doesn't mean the price is going to rally...the market is still grappling with near-term demand issues."