Order Stuffs

Oil extended its decline and fell over a dollar to dip below $106 a barrel on Monday, pressured by gains in the US dollar amid optimism that a vote on a $700 billion bailout to rescue the US financial system is near.

Congressional leaders from both parties said they had reached a tentative agreement on Sunday, but questions abound as to whether the rescue plan, which would use taxpayer funds to buy up toxic mortgage debt, would restore confidence to shaky markets and head off a deep recession.

US light crude for November delivery fell $1.09 to $105.85 a barrel by 0231 GMT, adding to Friday’s losses of $1.13. London Brent crude fell 82 cents to $102.72.

News that Iran, the world’s fourth-largest exporter of oil, has avoided new sanctions in a United Nations vote over the weekend also hit prices on Monday.

The UN Security Council unanimously passed a resolution on Saturday that again orders Iran to halt its nuclear enrichment work but imposes none of the new sanctions Washington and its allies wanted. But analysts said a slow recovery in oil and gas production in the US Gulf of Mexico, home to a quarter of US output, would offer some support for prices in the short term.

Some 57.4 per cent of oil production and 52.8 per cent of natural gas output in the Gulf of Mexico remained shut as of Sept. 25, the Minerals Management Service said on Friday.