Oil gains after Fed decision, drop in supplies

Source: Agencies | December 19, 2013, Thursday |

Online Edition

The price of oil bounced around but closed with a gain yesterday as the Federal Reserve decided to start to reduce its monetary stimulus and U.S. oil supplies fell for a third straight week.

Benchmark US crude for January delivery gained 58 cents to US$97.80 a barrel on the New York Mercantile Exchange. Oil rose as high as US$98.01 in the morning.

The Federal Reserve decided to reduce its stimulus for the US economy because the job market has shown steady improvement. Investors had feared such a move because Fed policies have encouraged investment in risky assets like oil. But the notion of a stronger US economy, and more demand for fuel, prevailed on yesterday.

Meanwhile, the Energy Department said crude oil supplies fell by 2.9 million barrels last week. Supplies of distillate fuels like diesel fell, while gasoline supplies rose less than expected, helping to boost oil prices.

In London, the February contract for Brent crude, a benchmark for international oils, was up US$1.19 to 109.63 a barrel on the ICE Futures exchange.

In other energy futures trading on Nymex:

— Wholesale gasoline gained 5 cents to US$2.70 a gallon.

— Heating oil added 5 cents to US$3.01 a gallon.

— Natural gas fell 4 cents to US$4.25 per 1,000 cubic feet.

Energy

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Oil gains after Fed decision, drop in supplies

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