Oil prices push higher as Fed stimulus supports
Oil prices rose on Friday but slipped from four-month highs as concerns about the threat to economic growth from high energy costs tempered hopes for stronger demand after the Federal Reserve launched an aggressive stimulus program.
Reuters reported that Brent was up a seventh straight session and United States crude futures headed for weekly gains as the dollar fell broadly, dropping to a four-month low versus the euro, after the Fed’s Thursday announcement of a third bond-buying program.
A weaker US currency is usually supportive to dollar-denominated commodities such as oil and industrial feedstock copper, which jumped to a 4-1/2 month peak.
Equities also received a lift from the US central bank’s action, with US stocks moving up and European shares jumping to a 14-month high. .N .EU
“The market is exhausted after rising so much, and the IEA (International Energy Agency) economist worrying about high oil prices probably helped pull prices back some,” said Dan Flynn, analyst at Price Futures Group in Chicago.
Current oil prices could push the global economy into recession, Fatih Birol, chief economist at the International Energy Agency said on Friday.
Birol said Europe and China are the region’s most vulnerable to high prices but declined to say whether this latest price jump could prompt the IEA to release oil reserves. He said the agency was monitoring markets very closely.
Culled from punchng