By Virginia Harrison, MarketWatch
SYDNEY (MarketWatch) — Crude-oil futures extended gains in electronic trading on Thursday, as the market digested comments from U.S. Federal Reserve Chairman Ben Bernanke, and as the U.S. dollar softened further.
Light, sweet crude for June delivery CLM11 +0.35% gained 68 cents, or 0.6%, to $113.44 a barrel on the New York Mercantile Exchange in Asian trading hours.
Oil prices headed higher after Bernanke said Wednesday that higher energy prices were tied to increased demand from emerging markets. Read more about Bernanke’s comments.
“If the Fed sees commodity inflation as being driven primarily by booming emerging economies, then a forecast for easing price pressures presumes policy makers in these economies will do the right thing, tighten policies appropriately and engineer soft landings for their countries and the world as a whole. The U.S. is simply along for the ride,” analysts at BNP Paribas said in a research note.
The analysts said Bernanke’s comments contributed to a strengthening of oil prices.
“Crude oil markets were skeptical of emerging-market hawkishness and prices pushed up to over $113 a barrel. Stagflation remains a risk scenario for the U.S. economy,” they added.
The rise in crude prices was matched by a dip in the U.S. dollar, with the dollar index DXY -0.63% , which compares the U.S. unit to a basket of rival currencies, falling to 72.975 from 73.746 in late U.S. trading Wednesday. Read more about currencies.
