* Oil rebounds near $95 a barrel on AIG rescue
* Prices find support from Nigeria and Hurricane Ike
(Updates prices)
By Annika Breidthardt
SINGAPORE, Sept 17 (Reuters) - Oil rebounded to nearly $95
a barrel on Wednesday, after two days of free fall, as an $85
billion bailout of American International Group <AIG.N> sparked
a relief rally on Wall Street.
Fresh attacks on Nigerian oil installations and supply
disruptions in the United States after Hurricane Ike crashed
through the Gulf of Mexico last week also supported prices, as
did expectations of a drop in U.S. crude oil and products
stocks.
U.S. light crude for October delivery <CLc1> rebounded
$3.71 to $94.86 a barrel at 0731 GMT after climbing earlier to
$95.00. On Tuesday, they fell to a seven-month low in a broad
cross-market sell-off, a more than $10 drop from Friday's
close.
London Brent crude for November delivery <LCOc1> climbed
$3.64 to $92.86 at the same time.
Oil futures are now little changed from the start of the
year but slowing demand due to economic weakness in the United
States and other top consumer nations has sent them tumbling
more than 35 percent from the record high above $147 hit in
mid-July.
"Everyone feared there would be a big meltdown in the
financial sector that would affect the economy. Now they are
hoping we'll just get through the AIG situation and that may be
lifting the market," said Anthony Nunan, a risk management
executive at Tokyo-based Mitsubishi Corp.
The U.S. government agreed to rescue AIG, preventing the
world's biggest corporate bankruptcy just days after investment
bank Lehman's collapse threw global markets into turmoil.
The Fed will provide AIG a bridge loan of $85 billion and
take an 80 percent stake in the firm, defusing the immediate
risk of a financial system meltdown but burdening the U.S.
taxpayer more following previous government bailouts.
[]
This week's upheaval in the U.S. financial system led
global markets to spiral lower, with oil tumbling to a
seven-month low, as investors fled to safe-haven assets, such
as gold and bonds.
It also prompted investment bank Goldman Sachs to cut its
forecast for WTI crude oil prices to $123 a barrel on average
in 2009, down from $148 previously. []
"We stand by our bullish view on oil, but just think it
will now take longer to get to our previous price targets," the
bank's commodity research team said in a note to clients.
Attacks this week on oil installations in the Niger Delta,
largely ignored earlier this week as investors focused on the
credit crunch, also helped prices. []
On Wednesday, Nigeria militants said they attacked another
Shell-operated <RDSa.L> oil flow station and threatened to
broaden their "oil war" to offshore fields. []
And Hurricane Ike toppled several oil and natural gas
production platforms in the Gulf of Mexico, signalling that a
full recovery of output from the region could be slow.
[]
U.S. gasoline stockpiles are already running at their
lowest level since November 2000, and could drop to their
lowest on record due to the effects of Ike, according to a
Reuters poll of analysts. []. The EIA data are due later
on Wednesday.
(Editing by Ben Tan)
