Crude Jumps With No Taper
Commodities prices skyrocketed on Wednesday following the US Federal Reserve's announcement that it would continue with its $85 billion per month bond buying plan.
Brent crude oil held on to gains on Thursday morning and traded at $110.99 at 7:37 GMT.
Most investors were expecting to see the US central bank cut its stimulus spending by $10 to $15 billion, so it came as a surprise when the bank opted to continue with its support for the economy. In a statement following the meeting, the Fed said it would continue with the current stimulus measures until more positive data proves that the economy is stable enough to stand on its own. The Fed's asset buying stimulus has been supporting commodity markets, and its reduction will likely drive prices down.
Oil prices also found support from data earlier on Wednesday which showed that US crude inventories had fallen to their lowest level since March 2012. The news helped boost crude and WTI prices as it indicated that demand in the US was picking up.
In Libya, oil production is still sluggish despite the progress made. The African nation is still operating at less than half of its normal capacity and has had to default on contractual obligations due to labor strikes that shut down several of its largest oilfields.
CNBC reported that after some of Libya's export terminals began to reopen, the nation's output rose to 620,000 barrels per day. The figure is still a far cry from the country's pre war output level of 1.6 million barrels per day.
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