Investing.com - Crude oil prices ended Friday’s session with a gain of nearly 2%, after Federal Reserve Chairman Ben Bernanke kept hopes alive for additional monetary easing to stimulate growth in the U.S. economy.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October settled at USD96.44 a barrel by close of trade on Friday. For the week, New York-traded crude oil futures rose 0.35%.
Oil prices rallied Friday after Fed Chief Bernanke said he was open to more quantitative easing to help boost growth in the U.S. economy.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.
Bernanke downplayed the risks of quantitative easing and said the program had been effective in providing “meaningful support" to the recovery. Quantitative easing can boost oil prices by spurring economic growth and by weakening the U.S. dollar.
Bernanke’s comments sparked a sell-off in the greenback, which further boosted the appeal of dollar-denominated commodities.
The dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, declined 0.6% to settle the week at 81.20, the lowest since May 15.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Oil prices were lower earlier in the week, dropping to a two-week low of USD93.94 a barrel on Thursday, amid ongoing concerns over the outlook for global economic growth and after oil facilities in the Gulf of Mexico managed to escape significant damage from Hurricane Isaac.
Official data on Wednesday showed that the U.S. economy expanded at a seasonally adjusted annual rate of 1.7% in the three months to June, slightly higher than the preliminary estimate of 1.5%, but remained below the 2-2.5% rate required every quarter to hold the unemployment rate steady.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Meanwhile, data released over the weekend showed that China’s Manufacturing Purchasing Managers Index contracted for the first time in nine months in August, falling to 49.2 from 50.1 in July, as new orders slumped in the face of weakening global demand.
The disappointing manufacturing report added to growing fears over a deeper-than-expected slowdown in the world’s largest copper consumer.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Market players now looked ahead to the European Central Bank’s policy meeting on September 6, amid ongoing expectations the central bank will introduce fresh measures to help stabilize the euro zone's sovereign debt markets.
On Thursday, Italy saw borrowing costs ease at an auction of five and 10-year bonds, reflecting renewed optimism that European leaders are making progress in tackling the region’s debt crisis.
Oil traders will also focus on Friday’s closely-watched report on U.S. non-farm payrolls, which will allow investors to gauge the strength of the faltering labor market and the need for additional easing.
The Fed’s two-day policy meeting beginning September 12 is also on investors’ minds, amid ongoing speculation over how close the U.S. central bank is to implementing more stimulus measures.
Oil prices have rallied in recent weeks, climbing nearly 9% in August, amid growing hopes policymakers in the U.S., Europe and China will introduce fresh easing measures to prop up their respective economies.
Renewed fears over escalating violence in Syria and lingering tensions between Iran and the West have also been supporting prices in recent weeks.
Floor trading in New York will be closed for the U.S. Labor Day holiday on September 3.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for October delivery settled at USD114.88 a barrel by close of trade on Friday. Prices touched a three-and-a-half month high of USD116.38 a barrel on August 23.
The London-traded Brent contract rose 1% over the week, with the spread between the Brent and the crude contracts standing at USD18.44 a barrel by close of trade Friday.
Brent prices drew additional support from a potential disruption to supplies from Norway, the world's eighth largest exporter. Tensions in the Middle East are also supporting Brent prices.
On the New York Mercantile Exchange, light sweet crude futures for delivery in October settled at USD96.44 a barrel by close of trade on Friday. For the week, New York-traded crude oil futures rose 0.35%.
Oil prices rallied Friday after Fed Chief Bernanke said he was open to more quantitative easing to help boost growth in the U.S. economy.
Speaking at the Fed’s annual symposium in Jackson Hole, Wyoming, Bernanke said the persistently high rate of unemployment was a “grave concern” and reiterated that the central bank was ready to provide additional policy accommodation as needed to shore up growth.
Bernanke downplayed the risks of quantitative easing and said the program had been effective in providing “meaningful support" to the recovery. Quantitative easing can boost oil prices by spurring economic growth and by weakening the U.S. dollar.
Bernanke’s comments sparked a sell-off in the greenback, which further boosted the appeal of dollar-denominated commodities.
The dollar index, which tracks the performance of the U.S. dollar against a basket of six other major currencies, declined 0.6% to settle the week at 81.20, the lowest since May 15.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
Oil prices were lower earlier in the week, dropping to a two-week low of USD93.94 a barrel on Thursday, amid ongoing concerns over the outlook for global economic growth and after oil facilities in the Gulf of Mexico managed to escape significant damage from Hurricane Isaac.
Official data on Wednesday showed that the U.S. economy expanded at a seasonally adjusted annual rate of 1.7% in the three months to June, slightly higher than the preliminary estimate of 1.5%, but remained below the 2-2.5% rate required every quarter to hold the unemployment rate steady.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Meanwhile, data released over the weekend showed that China’s Manufacturing Purchasing Managers Index contracted for the first time in nine months in August, falling to 49.2 from 50.1 in July, as new orders slumped in the face of weakening global demand.
The disappointing manufacturing report added to growing fears over a deeper-than-expected slowdown in the world’s largest copper consumer.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Market players now looked ahead to the European Central Bank’s policy meeting on September 6, amid ongoing expectations the central bank will introduce fresh measures to help stabilize the euro zone's sovereign debt markets.
On Thursday, Italy saw borrowing costs ease at an auction of five and 10-year bonds, reflecting renewed optimism that European leaders are making progress in tackling the region’s debt crisis.
Oil traders will also focus on Friday’s closely-watched report on U.S. non-farm payrolls, which will allow investors to gauge the strength of the faltering labor market and the need for additional easing.
The Fed’s two-day policy meeting beginning September 12 is also on investors’ minds, amid ongoing speculation over how close the U.S. central bank is to implementing more stimulus measures.
Oil prices have rallied in recent weeks, climbing nearly 9% in August, amid growing hopes policymakers in the U.S., Europe and China will introduce fresh easing measures to prop up their respective economies.
Renewed fears over escalating violence in Syria and lingering tensions between Iran and the West have also been supporting prices in recent weeks.
Floor trading in New York will be closed for the U.S. Labor Day holiday on September 3.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for October delivery settled at USD114.88 a barrel by close of trade on Friday. Prices touched a three-and-a-half month high of USD116.38 a barrel on August 23.
The London-traded Brent contract rose 1% over the week, with the spread between the Brent and the crude contracts standing at USD18.44 a barrel by close of trade Friday.
Brent prices drew additional support from a potential disruption to supplies from Norway, the world's eighth largest exporter. Tensions in the Middle East are also supporting Brent prices.