RTE:Oil prices rise on hopes of gradual Fed wind-down
The price of oil rose today after disappointing US housing figures led to speculation that the US Federal Reserve might take a very gradual approach toward winding down its economic stimulus.
Benchmark oil for October delivery was up 50 cents to $106.92 a barrel in electronic trading on the New York Mercantile Exchange.
The contract gained $1.39, or 1.4%, to close at $106.42 on Friday.
Brent crude gained 21 cents to $111.25 a barrel on the ICE Futures exchange in London.
Oil rose after the US government said that Americans cut back sharply in July on purchases of new homes, a sign that higher mortgage rates may weigh on the housing recovery.
Traders apparently saw the weak data as an indication that the Fed may need to wait before slowing down its bond-buying programme.
A slower phase-out of the Federal Reserve's monetary stimulus could also keep the dollar weaker, making commodities that are traded in dollars more appealing to investors with other currencies.
