Oil climbed above US$50 a barrel yesterday to close at a three-month high after the Fed said it was seeking to purchase US Treasuries, mortgage-backed bonds
Oil prices rose on Friday to remain above US$51 per barrel as commodities extend their week-long rally in the wake of the Federal Reserve's decision to pump US$1 trillion into the American financial system to revive lending and bolster economic growth.
Oil climbed above US$50 a barrel yesterday to close at a three-month high after the Fed said it was seeking to purchase US Treasuries, mortgage-backed bonds and other debt. Commodities surged the most this year as the dollar weakened against the euro. Gold and platinum are set for their first weekly gain in a month.
Crude oil for April delivery fell 56 cents to US$51.05 a barrel on the New York Mercantile Exchange in after-hours electronic trading at 10:24 a.m. in Singapore. Oil is up 10% this week, set for its longest series of weekly gains since April 2008.
Yesterday, oil futures surged US$3.47 to US$51.61 a barrel, the highest settlement since Nov. 28. The April contract expires at the close today. The more-active May contract slipped 45 cents to US$51.59 a barrel in after-hours trading after jumping 6.4% yesterday.
Crude has gained 14% so far this year as record production cuts by OPEC started to reduce a supply glut caused by the worst economic crisis since World War II. Prices are down 65% from July’s record of US$147.27 a barrel.
OPEC will cut crude oil shipments 3.3% in the four weeks ending April 4 as producers seek to adhere to quotas, tanker-tracker Oil Movements said yesterday. The group decided at a March 15 meeting to hold output targets steady, pledging to tighten compliance with quotas.
The dollar sank to nearly a three-month low against a basket of major currencies this week and commodities, which are priced in the US currency, jumped as inflation worries grew post the Fed's announcement.
The trade-weighted Dollar Index, which tracks the currency’s performance against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, slid yesterday for an eighth day, the longest stretch in a year. The dollar was down 1.4% to US$1.3667 per euro from US$1.3474 on March 18.
Gold for immediate delivery fell 0.8% to US$952.45 an ounce at 9 a.m. in Singapore after touching US$961.51 yesterday, the highest since Feb. 27. The Reuters/Jefferies CRB Index of 19 prices rose 11.36, or 5.3%, to 225.30 yesterday, the highest since Jan. 26.
