NEW YORK (AP) — Oil prices swung higher Tuesday, snapping a four-day plunge as investors temporarily halted their frantic selling to see whether the government's sweeping economic bailout can stem a widening global downturn.
Light, sweet crude for November delivery rose $2.25 to settle at $90.06 a barrel on the New York Mercantile Exchange, after earlier trading as high as $93.02.
Prices had lost nearly $13 in the past four trading sessions as a widening economic crisis spreads overseas and undercuts energy demand forecasts.
Despite Tuesday's modest advance, analysts said crude's fundamentals suggest prices are headed lower.
"We've just seen a huge shift in sentiment where the focus isn't on supply anymore. It's on demand, and that demand continues to weaken," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.
At the pump, crude's general downward trend continued to weigh on retail gas prices. A gallon of regular fell 2.4 cents overnight to a new national average of $3.48, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices peaked at $4.114 a gallon on July 17.
Crude's modest gains came as investors trickled back into the oil market a day after growing financial worries weighed down markets across the globe. Tensions eased some after the Federal Reserve announced an emergency plan to buy up massive amounts of companies' short-term debt in its latest effort to unclog jammed credit markets.
Still, the initiative, along with the government's $700 billion financial bailout plan approved last Friday, failed to soothe investors worried about a deepening economic malaise. The Dow Jones industrial average fell more than 500 points after advancing slightly earlier in the day. On Monday, the blue chip index fell below 10,000 for the first time in four years.
Meanwhile, oil market investors are looking for signs that the Organization of the Petroleum Exporting Countries may cut production if prices fall further. Iranian Oil Minister Gholam Hossien Nozari on Saturday called on fellow OPEC members not to pump too much oil in a bid to keep prices above $100.
However, OPEC may be reluctant to slash output since higher gasoline and heating costs would be a further drag on economic growth.
"I think it's very difficult for OPEC," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "With the international economy looking weak, decisions to support oil prices have to be balanced against not making the situation worse."
A stronger dollar has also been pressuring oil prices lately. The greenback weakened slightly Tuesday, helping send prices higher. Investors tend to buy commodities like oil to defend against dollar weakness and a hedge against inflation, but sell crude as the U.S. currency strengthens.
The 15-nation euro bought $1.3595 in trading Tuesday, up from the $1.3457 late Monday in New York but still at lows not seen this year.
In other Nymex trading, heating oil rose 3.17 cents to settle at $2.5057 a gallon, while gasoline futures rose less than half a penny to settle at $2.0628. Natural gas for November delivery fell 6.7 cents to settle at $6.768 per 1,000 cubic feet.
In London, November Brent crude rose 98 cents to settle at $84.66 per barrel on the ICE Futures exchange.
Associated Press Writers George Jahn in Vienna, Austria and Alex Kennedy contributed to this report from Singapore.
