LONDON, Sept 30: Oil prices rallied on Tuesday on bargain-hunting after slumping 10 per cent a day earlier when US lawmakers rejected a multi-billion-dollar rescue package for ailing American banks, traders said.

New York’s main contract, light sweet crude for November delivery, climbed $2.41 to $98.78 a barrel.

London’s Brent North Sea crude for November rose $2.23 to $96.23.

Prices had nosedived on Monday, driven by worries that further economic turmoil in the United States, the world’s largest economy, could significantly dampen global oil demand, traders said.

“Crude futures bounced back up (on Tuesday), following a heavy sell off, with uncertainty still haunting financial markets but with European (stock) indices holding firm,” said Sucden analyst Andrey Kryuchenkov.

—AFP