Brent Climbs Above $107 On Libyan Supply Problems
Brent crude oil started the day on a high note, trading at $107.40 at 6:28 GMT on Thursday morning.
The commodity found support from ongoing disruptions in Libya as well as confirmation from Federal Reserve Chairwoman nominee Janet Yellen that the US Federal Reserve is unlikely to begin tapering at its December meeting.
Strikes and protests in Libya continued to close down several of the nation's largest oilfields and put pressure on international corporations. CNBC reported that the head of Italian oil company Eni SpA (NYSE: E) said the nation's troubles were escalating. Libyan oil exports have been cut to less than half of their normal capacity for months as the government attempts to regain control and settle labor disputes.
Brent was also buoyed by the dismissal of speculation that the US Federal Reserve was planning to cut back on its $85 billion per month stimulus spending at its December meeting. Better than expected jobs data last week renewed rumors that the Fed could taper as soon as December, however the most likely candidate to head the US central bank, Janet Yellen, defended the bank's stimulus spending in a speech on Wednesday.
Yellen said the US economy was not performing up to its potential and that inflation would likely remain below the bank's 2 percent target. Her comments confirmed to markets that she is in fact as dovish as investors had been expecting. Following Yellen's comments, most revised their tapering predictions and aren't expecting the bank to pull back on its spending until March.
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