Oil price stoked by US banks rescue

The $700 billion (£383 billion) US banking sector bail-out has again stoked oil prices after the jump of $7 on Friday.

Light, sweet crude has risen another $2 to $106.63 on the New York Mercantile Exchange, the world's benchmark price.

It follows speculation that the rescue plan will stabilise the US financial system and help boost economic growth, thereby increasing demand for oil.

In London, November Brent crude also broke through the $100 barrier to hit $101.40 on the ICE Futures exchange.

US Treasury Secretary Hank Paulson is urging lawmakers, who received the rescue package details over the weekend, to approve the proposal as soon as possible.

Traders were also watching news from Nigeria, where the country's main militant group in the southern oil region have declared a unilateral ceasefire, ending the worst spate of militant attacks in years.

Last week oil traded as low as $91 a barrel, having fallen from the peak of $147 a barrel it reached in July.

UK motorists will be hoping the upward trend in oil prices does not continue after a rare period of falling prices in recent days.

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