Brent Soars As Dollar Slides
Brent crude oil rose to a near three month high on Thursday after the dollar slid on Federal Reserve Chairman Ben Bernanke's comments. The commodity traded at $108.43 at 5:07 GMT on Thursday morning.
Since the Fed announced in June that it was planning to taper its asset buying plan as the US economy improved, the dollar has been on an upward climb. Following the bank's meeting, the minutes revealed that some of the Fed's board members wanted to see a larger improvement in the labor market before the bank pulled back.
On Wednesday, Bernanke echoed those concerns by saying that the bank isn't likely to cut back on stimulus for the remainder of the year. He said the Fed was going to continue with accommodative policies and that there could still be some weakness in the labor market that unemployment figures aren't showing.
The dollar's decline has helped boost Brent prices, but because the commodity was already climbing, it didn't rise as sharply as others like gold and copper, which jumped 2 percent.
Adding to Brent's strength was data from the Energy Information Administration which showed that the US' economic recovery was finally translating into increased oil demand. Reuters reported that the EIA report on Wednesday showed that US oil stocks were down 10 million barrels for the second week in a row. The report also pointed out that refinery demand had increased to its highest in six years.
The Organization of Petroleum Exporting Countries optimistically predicted that the strengthening global economy was likely to increase oil demand next year. The organization is expecting demand to increase by 1 million barrels per day in 2014.
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