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Oil settles near US$82 as Fed keeps rates low
Source: Agencies |
March 17, 2010, Wednesday
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OIL prices climbed back near US$82 yesterday as the Federal Reserve said again that it will hold interest rates at record lows as the U.S. economy continues to recover.
Benchmark crude for April delivery rose US$1.90 to settle at US$81.70 on the New York Mercantile Exchange.
The stock market inched higher, reassured by the Fed's steady-as-she-goes approach and its view that the economy appeared to be stabilizing, although it was not fully recovered.
Earlier in the day, the Commerce Department said that construction of new homes and apartments fell 5.9 percent in February to a seasonally adjusted annual rate of 575,000 units.
The weak housing report "puts less pressure on the Fed to raise interest rates," said PFGBest Research Analyst Phil Flynn.
"The Fed has at least the perception of more wiggle room, and that puts downward pressure on the dollar and upward pressure on crude."
The dollar continued its decline in afternoon trading, making dollar-denominated crude cheaper for holders of foreign currencies.
Oil prices have swung between US$70 and US$85 for the better part of six months as global crude demand slowly recovers from the Great Recession but remains weak in developed countries.
"We have shifted from a bullish to a bearish trading posture," Ritterbusch and Associates said in a report. "We will look for a resumption of selling by midweek."
Saudi Arabia's oil minister said yesterday that he expects OPEC to keep output steady for the rest of this year. Ministers of the 12-nation group meet Wednesday in Vienna.
In other Nymex trading in April contracts, heating oil rose 5.67 cents to settle at US$2.1143 a gallon, and gasoline added 5.22 cents to close at US$2.275 a gallon. Natural gas fell 4.4 cents to settle at US$4.347 per 1,000 cubic feet. Earlier, it hit a 52-week low of US$4.323.
In London, Brent crude rose US$1.13 to settle at US$79.02 on the ICE futures exchange.
Benchmark crude for April delivery rose US$1.90 to settle at US$81.70 on the New York Mercantile Exchange.
The stock market inched higher, reassured by the Fed's steady-as-she-goes approach and its view that the economy appeared to be stabilizing, although it was not fully recovered.
Earlier in the day, the Commerce Department said that construction of new homes and apartments fell 5.9 percent in February to a seasonally adjusted annual rate of 575,000 units.
The weak housing report "puts less pressure on the Fed to raise interest rates," said PFGBest Research Analyst Phil Flynn.
"The Fed has at least the perception of more wiggle room, and that puts downward pressure on the dollar and upward pressure on crude."
The dollar continued its decline in afternoon trading, making dollar-denominated crude cheaper for holders of foreign currencies.
Oil prices have swung between US$70 and US$85 for the better part of six months as global crude demand slowly recovers from the Great Recession but remains weak in developed countries.
"We have shifted from a bullish to a bearish trading posture," Ritterbusch and Associates said in a report. "We will look for a resumption of selling by midweek."
Saudi Arabia's oil minister said yesterday that he expects OPEC to keep output steady for the rest of this year. Ministers of the 12-nation group meet Wednesday in Vienna.
In other Nymex trading in April contracts, heating oil rose 5.67 cents to settle at US$2.1143 a gallon, and gasoline added 5.22 cents to close at US$2.275 a gallon. Natural gas fell 4.4 cents to settle at US$4.347 per 1,000 cubic feet. Earlier, it hit a 52-week low of US$4.323.
In London, Brent crude rose US$1.13 to settle at US$79.02 on the ICE futures exchange.
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