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Oil up in Asia on new Fed Stimulus Measures

Posted by on Friday, November 5, 2010, 10:46
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Oil topped 87 dollars in Asian trade Friday as new US Federal Reserve stimulus measures spurred investor appetite and dragged down the dollar, analysts said.

Oil up in Asia on new Fed Stimulus Measures
Oil up in Asia on new Fed Stimulus Measures

New York’s main contract, light sweet crude for December, jumped 54 cents to 87.03 dollars a barrel after reaching 86.78 dollars in Thursday intraday trade, its highest price since early May.

Brent North Sea crude for delivery in December gained 64 cents to 88.64 dollars, also breaching highs last seen on May 4.

Oil was rallying “thanks to increased investor risk appetite and the weaker US dollar,” the Commonwealth Bank of Australia said in a report.

“The US Federal Reserve’s announcement… that it will purchase 600 billion dollars of government bonds and roll over another 300 billion dollars boosted commodity market sentiment and supported prices across the board,” it added.

The dollar tumbled on Thursday after the Fed announcement. The euro was trading at 1.4209 dollars in early Asian trade, edging down slightly from 1.4213 dollars late Thursday.

The European currency had climbed to 1.4282 dollars — its highest level since January 20 — on Thursday.

A weaker greenback makes dollar-priced crude more attractive to buyers using other currencies.

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