Crude oil may rise next week as the dollar declines after the Federal Reserve said the “moderate” economic recovery still requires record-low interest rates, a Bloomberg News survey showed. Twenty-one of 35 analysts, or 60 percent, forecast oil will increase through May 6. Nine respondents, or 26 percent, predicted prices will decline and five projected little change. Last week, 38 percent of respondents said futures would gain. The dollar dropped after Federal Reserve Chairman Ben S. Bernanke said April 27 that the central bank would keep borrowing costs low and maintain record monetary stimulus. A falling U.S. currency bolsters demand for commodities as an alternative investment. The dollar fell against the euro during the previous eight days. “The dollar is clearly expendable under the Fed’s easing regime,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “It’s likely further declines will advance oil and commodity prices in the coming week.” The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, slid 0.1 percent to 73.044 at 5 p.m. in New York after earlier falling 0.4 percent to 72.834, the lowest level since July 2008. Oil has advanced 25 percent in New York this year. Unrest in the Middle East and North Africa has toppled leaders in Egypt and Tunisia and spread to Libya, Algeria, Bahrain, Iran, Oman, Syria and Yemen. NATO Warplanes The North Atlantic Treaty Organization said its warplanes attacked combat vehicles near the besieged Libyan port city of Misrata on April 27, following reports that one of its strikes killed rebel fighters battling Muammar Qaddafi’s forces in the area. Libya has Africa’s biggest proven oil reserves. Crude oil for June delivery rose $1.64, or 1.5 percent, to $113.93 a barrel this week on the New York Mercantile Exchange, the highest settlement since Sept. 22, 2008. Futures rose 6.8 percent in April, in an unprecedented eighth consecutive month of gains. Prices are up 34 percent from a year ago. The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004. Bloomberg’s survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were: RISE NEUTRAL FALL 21 5 9 To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Source