Oil falls $2 on doubts over U.S. rescue plan

Oil was down around $2 on Friday, pressured by concerns over the financial market crisis after talks between U.S. politicians on a bailout package stalled.
The $700 billion deal to rescue the faltering U.S. financial system hit a wall on Thursday amid bickering between Democrats and Republicans.
On Friday, U.S. House Speaker Nancy Pelosi said she hoped for a final agreement within the next 24 hours.
U.S. crude fell $2.74 to $105.28 a barrel by 1504 GMT, while London Brent crude traded down $2.26 to $102.34.
"The general direction of the market is heading downwards because the economic sentiment and economic outlook are weak," said John Vautrain, an energy analyst at Purvin & Gertz in Singapore.
"It is a very volatile time and the market will get more and more jittery each day the U.S. rescue plan gets delayed."
Oil prices have dropped from record highs over $147 a barrel struck in July as the economic crisis and high fuel costs hurt demand in the United States and other developed economies.
Further pressure has come as investors — who flocked into oil and other commodities earlier this year as a hedge against inflation and the weak dollar — shift into safer havens.
Oil has found some support from supply disruptions in the U.S. Gulf of Mexico, home to a quarter of U.S. crude production, caused by Hurricane Ike.
Shell Oil, the largest producer in the Gulf of Mexico, expects the bulk of its offshore fields back on line within two weeks.
The International Energy Agency said on Thursday it did not need to release emergency stocks to help bolster supplies, however, even though nearly 60 percent of the region's output remained shut as of Thursday morning.