Crude Oil Rises a Fourth Day After Fed Move Weakens Dollar

Crude oil climbed for a fourth day in New York, the longest rising streak since September, as the dollar traded near a nine month low against the euro after the Federal Reserve said it will expand stimulus to spur the economy. Crude rose above $85 a barrel to trade near the highest in six months amid speculation of a recovery in the U.S., the world’s largest oil consuming nation. The Fed yesterday said it will buy an additional $600 billion of Treasuries through June. U.S. gasoline stockpiles fell last week to the lowest in almost a year, according to an Energy Department report.

“The Fed is pumping money into the economy and the money doesn’t have that many places to go, interest rates are almost zero,” said John Vautrain, senior vice president at U.S. energy consultants Purvin & Gertz Inc. in Singapore. “That’s pumping up the value of commodities.” Crude for December delivery rose as much as 60 cents, or 0.7 percent, to $85.29 a barrel in electronic trading on the New York Mercantile Exchange. It was at $85.28 at 10:46 a.m. Singapore time. Yesterday, the contract reached $85.36, the highest intraday price since May 4. Prices are in the longest rally since a four day run through Sept. 27. Futures have gained 7.5 percent this year.

The dollar yesterday touched $1.4179 against the 16 nation euro, the lowest since Jan. 26, and was at $1.4132 today. A decline in the U.S. currency bolsters the investment appeal of commodities as a hedge against inflation......Read the entire article.


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