Mark Shenk and Margot Habiby
Bloomberg
Crude oil rose to a five-month high as the dollar declined on speculation the Federal Reserve will act to revive the U.S. economy by buying bonds.
Oil climbed 0.5 percent as the U.S. currency slipped to a 15-year low against the yen, bolstering the appeal of commodities to investors. Fed Chairman Ben S. Bernanke said Oct. 4 that restarting large-scale asset purchases would probably spur growth. A government report showed that U.S. crude stockpiles increased last week as fuel supplies fell.
“This dollar situation is really at a critical point, and there’s increasing talk of it extending its move lower, which is starting to feed directly into this crude rally,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund focusing on energy. The fuel supply drop will provide “a fundamental narrative and support us going higher,” he said.
Crude oil for November delivery rose 41 cents to $83.23 a barrel on the New York Mercantile Exchange, the highest settlement price since May 3. Futures are up 17 percent from a year ago.
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