NEW YORK - Oil prices rose modestly but closed well off their session highs Thursday as a late-day stock market rally soothed investors' concerns about the economy and demand for energy. Earlier, the contract topped $100 a barrel as investors uneasy about the worsening financial crisis flocked to commodities as a safe haven.
Light, sweet crude for October delivery added 72 cents to settle at $97.88 a barrel on the New York Mercantile Exchange. The contract had gone as high as $102.24 as worries intensified about the stability of the U.S. financial system and as investors fled the equities market in favor of commodities.
"Oil's torn. It doesn't know if it's a financial indicator or a commodity," said Phil Flynn, an energy analyst at Alaron Trading Corp. in Chicago. "It rallied with gold and silver early on and then later, with the stock market."
Investors first sought commodities including oil as a hedge against the economic fallout from the financial crisis; they sent the October contract soaring $4 and past $100. Oil prices retreated late in the day, after the stock market surged on a report that the government was considering creation of an entity that would hold the bad debt that has crippled U.S. financial institutions.
ASSOCIATED PRESS
