Oil prices have closed at their lowest level in two weeks tumbling below $94 a barrel on doubts that a revamped financial bailout plan will be enough to avoid a protracted economic slump and revive dwindling US energy demand.
The declines came a day after the Senate overwhelmingly approved the rescue package.
The bill now goes to the House of Representatives for an expected vote on Friday.
However, even if the bailout plan wins approval, oil market traders are doubtful it will steady the teetering US economy and reverse flagging demand for energy in the world's largest consumer.
The plan would remove billions of dollars in bad mortgages and other toxic debt from the books of banks and other financial firms, though critics argue it doesn't go far enough to help ordinary Americans.
"I think the oil market believes that no size of a rescue plan is going to be enough to stave off a recession," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.
He said government data has released showing a slowdown in US manufacturing and growing unemployment suggest that a drop in US energy demand "is going to accelerate as we head into a steeper recession".
Light, sweet crude for November delivery fell $4.56 to settle at $93.97 a barrel on the New York Mercantile Exchange.
It was crude's lowest settlement since September 16. Prices earlier jumped as high as $100.37 but eased back later as traders digested the details of the revised bailout package.
The November crude contract fell $2.11 to settle at $98.53 Wednesday.
Oil prices have fallen about $15, or 13 per cent, in the past month as investor concerns about waning global energy consumption outweigh threats to supplies caused by Gulf Coast hurricanes and militant attacks in Nigeria.
The slump in energy demand has accelerated beyond the US. In India, domestic oil product sales totalled 2.41 million barrels per day in August, the lowest level this year, according to Barclays Capital research.
In the same month, Japan's oil demand fell by 8.4 per cent.
Significant gains over the past days by the dollar against the euro have also helped push down prices. Investors tend to buy commodities like oil to defend against dollar weakness and a hedge against inflation, but return to the US currency as it strengthens.
Recent data shows that US fuel demand is falling while supplies rise.
Fuel consumption for the four-week period ended September 26 reached about 19 million barrels a day, down seven per cent from the same period a year ago, according to the Energy Information Administration.
