World oil prices hit fresh six-month peaks on Thursday as the dollar slumped on the back of the US Federal Reserve’s new huge stimulus package aimed at boosting the American economy.
Brent North Sea crude for delivery in December delivery rallied as high as 87.59 dollars, reaching a level last seen on May 4. It later stood at 87.46, up 1.08 dollars from Wednesday’s close.
New York’s main contract, light sweet crude for December, surged to a similar high point at 86.05 dollars, before pulling back to 85.88, up 1.19 dollars.
The dollar tumbled on Thursday after the Fed announced that it would launch a new asset-buying plan, or quantitative easing (QE), worth 600 billion dollars, to bolster the nation’s sluggish economic recovery.
In reaction, the European single currency soared to 1.4264 dollars, reaching the highest level since January 20, as traders fretted that the Fed policy could water down the value of the US unit.
“The Fed announced yesterday evening that it would be buying up more US treasuries. The much weaker US dollar as a result is now giving impetus to commodity prices,” said Commerzbank analyst Carsten Fritsch.
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