Investing.com – Crude oil futures edged higher on Thursday, boosted by a weaker U.S. dollar and the Federal Reserve’s pledge for a prolonged easing of monetary policy, but concerns over a slowdown in U.S. oil demand kept prices below the key USD100-level.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD99.64 a barrel during European morning trade, edging 0.24% higher.
It earlier rose by as much 0.45% to trade at a session high USD100.23 a barrel.
At the conclusion of Wednesday’s policy-setting meeting, the Fed’s Open Market Committee said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments weighed heavily on the U.S. dollar, boosting dollar-denominated oil futures contracts.
But concerns over the U.S. economic recovery remained after the Fed revised down its forecast for economic growth this year to a range of between 2.2% and 2.7%, from a range of 2.5% to 2.9% in November.
Bernanke described the recovery as “fragile” and said that the unemployment rate remains “elevated.”
The U.S. was the world’s biggest oil-consuming country in 2010, responsible for 22% of global oil demand.
On Wednesday, government data showed that U.S. crude supplies rose by 3.6 million barrels last week, above expectations for a modest 0.9 million barrel increase.
Oil prices continued to draw support from ongoing tensions between Iran and the West amid reports that the Islamic Republic was considering a plan to cut European oil exports early in response to the European Union’s decision to embargo imports of Iranian oil.
“With the diplomatic process continuing to be emphasized, we continue to see the highest short term risk revolving around a pre-emptive sales embargo by Iran in response to tighter sanctions," Wall Street bank JP Morgan said in a report Wednesday.
The International Monetary Fund warned Wednesday that a halt of Iran’s oil exports to countries in the Organization of Economic Cooperation and Development would likely lead to an increase in crude prices of as much as USD30 a barrel.
Meanwhile, in the euro zone, talks on a debt swap deal between Greece and its creditors were to resume in Athens later in the day.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery rose 0.66% to trade at USD110.55 a barrel, with the spread between the Brent and crude contracts standing at USD10.91 a barrel.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD99.64 a barrel during European morning trade, edging 0.24% higher.
It earlier rose by as much 0.45% to trade at a session high USD100.23 a barrel.
At the conclusion of Wednesday’s policy-setting meeting, the Fed’s Open Market Committee said in a statement that economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The new commitment replaces the statement that economic conditions were likely to stay at the historic low range of 0% to 0.25% until at least mid-2013.
At his press conference following the decision, Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table.”
The comments weighed heavily on the U.S. dollar, boosting dollar-denominated oil futures contracts.
But concerns over the U.S. economic recovery remained after the Fed revised down its forecast for economic growth this year to a range of between 2.2% and 2.7%, from a range of 2.5% to 2.9% in November.
Bernanke described the recovery as “fragile” and said that the unemployment rate remains “elevated.”
The U.S. was the world’s biggest oil-consuming country in 2010, responsible for 22% of global oil demand.
On Wednesday, government data showed that U.S. crude supplies rose by 3.6 million barrels last week, above expectations for a modest 0.9 million barrel increase.
Oil prices continued to draw support from ongoing tensions between Iran and the West amid reports that the Islamic Republic was considering a plan to cut European oil exports early in response to the European Union’s decision to embargo imports of Iranian oil.
“With the diplomatic process continuing to be emphasized, we continue to see the highest short term risk revolving around a pre-emptive sales embargo by Iran in response to tighter sanctions," Wall Street bank JP Morgan said in a report Wednesday.
The International Monetary Fund warned Wednesday that a halt of Iran’s oil exports to countries in the Organization of Economic Cooperation and Development would likely lead to an increase in crude prices of as much as USD30 a barrel.
Meanwhile, in the euro zone, talks on a debt swap deal between Greece and its creditors were to resume in Athens later in the day.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery rose 0.66% to trade at USD110.55 a barrel, with the spread between the Brent and crude contracts standing at USD10.91 a barrel.