Oil Falls Below $107

Oil dropped $3 a barrel on Tuesday, weighed by doubts about the U.S. bailout plan and as investors booked profits after an historic one-day rise in the previous session.

Although oil surged a day earlier on hopes the plan would support the economy and fuel demand, analysts said doubts lingered over how the package would be paid for. The concern also pressured European and Asian stocks.

U.S. crude for November fell $3.01 to $106.36 a barrel by 5:15 a.m. EDT. Brent crude for the same month was off $3.12 to $102.92.

The November U.S. crude contract rose nearly $7 on Monday, while the expiring October contract, which traded up to $25 higher, settled up 15.7 percent at $120.92 -- the biggest one-day gain on record.

Gold fell 1 percent in Europe on Tuesday as the dollar recovered some lost ground versus the euro and investors took profits after the previous session's gains.

Spot gold was at $889.90/891.90 an ounce by 0856 GMT, down 1 percent from $900.20 an ounce at the nominal New York close on Monday.

TradingEconomics.com, Bloomberg.com
9/23/2008 5:53:03 AM