Analysts say Bernanke had firmed a perception that the Federal Reserve may print more money to support the economy
Oil prices edged higher on Monday as bearish comments from US Federal Reserve Chairman Ben Bernanke were seen as increasing the probability of further growth-boosting quantitative easing, pushing the dollar lower.
The US economy needs to grow more quickly if it is to produce enough jobs to bring down the unemployment rate, Bernanke said, which analysts said had firmed a perception that the Federal Reserve may print more money to support the economy.
"It’s popped up on expectations of more quantitative easing, which has seen the dollar weakening," said Michael Hewson, analyst at CMC Markets.
Brent crude futures were up 58 cents to $125,71 a barrel at 1522 GMT. US crude futures were up 32 cents at $107,19.
The dollar index was down 0,3%, making purchases of oil, which is priced using the US currency more affordable in other currencies.
Supply disruptions from Iran, Syria, South Sudan and Yemen have supported oil prices this year, with Brent up 16%.
On Friday, crude rose by almost $2 per barrel as details emerged of the first sizeable drop in Iranian exports as some buyers stopped or scaled back purchases to avoid Western sanctions aimed at its disputed nuclear program.
An unexpected improvement in German business sentiment for the fifth month in a row in March also supported prices, but gains were kept in check by worries about the euro zone.
Spain could be the next focus of contagion in the common currency area, as bond investors switch into Italian debt ahead of a meeting of euro financial ministers at the end of the month to decide whether to increase a bailout fund.
"Prices are in a range moving between worries about demand destruction and tensions with Iran," Petromatrix’s Olivier Jakob said on Monday, adding it would be difficult to break out of the range.
IRAN SUPPLY
On the supply front, crude exports from Iran appear to have fallen this month by around 300 000 barrels per day (bpd), or 14%, according to estimates from industry consultant Petrologistics and an oil company.
The chances of a prompter-than-expected resolution to the standoff that shut out production from South Sudan also added to pressure on the downside.
South Sudan said on Saturday it hoped to resolve a dispute over oil and other outstanding issues with Sudan within a month or two.
A restart at South Sudan’s oilfields will bring output from the two countries back to about 350 000 bpd, up from about 50 000 bpd currently.
