MW: Crude rallies as ECB cuts rates less than expected
European Central Bank reduces key interest rate to new low of 1.25%
Oil futures soared Thursday after the European Central Bank surprised markets by cutting interest rates less than expected, triggering a slump in the U.S. dollar and a rally in the euro.
Crude oil for May delivery rose $2.59, or 5.3%, to $50.95 a barrel in electronic trading on Globex.
Earlier, oil futures soared to an intraday high of $51.53 a barrel.
"The ECB has got us rocking today," said Phil Flynn, vice president at Alaron Trading in Chicago.
"It seems to be the biggest factor today," Flynn said. "It's an amazing turnaround for the ECB because some people speculated that they might go in and buy some debt, but they turned around and cut rates less than expected and that was very bullish for commodities."
The euro soared against the U.S. dollar Thursday after the ECB cut its benchmark interest rate by only 25 basis points.
The ECB lowered its key interest rate to 1.25%, a fresh record low, but most economists expected a cut of 50 basis points to 1%. Read more.
Also boosting oil prices was enthusiasm seen in world equities markets following news that the Group of 20 nations may decide to boost the resources of the International Monetary Fund.
