|SINGAPORE - Oil prices were steady Friday in Asia as investors waited for details of a possible U.S. government plan that could help ease a credit crisis that has roiled global markets.
Light, sweet crude for October delivery rose 24 cents to $98.12 a barrel in electronic trading on the New York Mercantile Exchange midday in Singapore. Overnight, the contract rose 72 cents to settle at $97.88.
After discussions Thursday night with congressional leaders, Treasury Secretary Henry Paulson Paulson said the goal was to come up with a "comprehensive approach that will require legislation" to deal with the bad debts on banks' balance sheets. He did not provide any details, but the plan taking shape called for Congress to give the Bush administration the power to buy distressed bank assets.
"The market is taking guidance from some mild restoration of confidence in the US, but the market still remains cautious," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "For the moment they have calmed some fears, but there will be a lot of fence sitting before the plan comes out."
Oil prices have fallen about $50 since reaching a record $147.27 a barrel on July 11 on concern that slowing economic growth in developed countries will undermine crude demand.
Those fears deepened this week as turmoil in the U.S. financial system led to the bankruptcy of investment bank Lehman Brothers Holding Inc. and an $85 billion government rescue of insurer American International Group Inc.
"Oil demand is coming off in the U.S. regardless of what Paulson does, but we may not see the sharp fall off that the market was increasingly worried about," Pervan said.
Nigeria's main militant group said Thursday that it bombed another oil pipeline, marking a sixth straight day of stepped-up violence in Africa's oil giant.
The Movement for the Emancipation of the Niger Delta said in a statement that it used high explosives to destroy the conduit run by a unit of Royal Dutch Shell PLC.
Shell officials could not immediately be reached for comment.
The militants have declared an "oil war" in the Niger Delta, where militants demanding more oil-industry funds from the federal government have increased attacks. About 40 percent of Nigeria's normal daily oil production is now offline, severely curtailing exports.
"The focus of the market right now has switched from supply to demand," Pervan said. "So these stories will have some impact, but not as much as they had during the last six month when the market was supply-driven."
In other Nymex trading, heating oil futures fell 2.81 cents to $2.7966 a gallon, while gasoline prices dropped 3.23 cents to $2.4307 a gallon. Natural gas for October delivery rose 17.9 cents to $8.089 per 1,000 cubic feet.
In London, October Brent crude rose 9 cents to $94.93 a barrel on the ICE Futures exchange