Crude Oil rose on Tuesday after the Federal Reserve lowered its benchmark interest rate.

Crude oil for January delivery rose $1.59 or 1.8 percent to $89.45 a barrel at 3:22 p.m. on the New York Mercantile Exchange. Brent crude oil for January rose $1.15 or 1.31 percent to $88.98 a barrel on the ICE Futures Europe Exchange.

The interest rate reduction announced today at 2:15 p.m. may increase demand for commodities as investors flee volatility in stocks. The Dow Jones Industrial Average fell 295.32 points, or 2.2 percent to 13,431.71.

The U.S. Energy Department forecast today that global oil demand will grow 1.6 percent in 2008.

Crude oil Update