NEW YORK ( TheStreet) -- Oil prices were bouncing off lows that followed Federal Reserve Chairman Ben Bernanke's speech Friday as the markets assessed the Fed's commitment to consider further stimulus measures at its next meeting in September.
Brent crude oil for December delivery was up 51 cents to $111.13 a barrel and the October West Texas Intermediate (WTI) light sweet crude contract was down by 28 cents to $85.02.
Bernanke -- during his speech at the Federal Reserve symposium at Jackson Hole, Wyo. -- said the "the recovery from the crisis has been much less robust than we had hoped ... notwithstanding the severe difficulties we currently face, I do not expect the long-run growth potential of the U.S. economy to be materially affected by the crisis and the recession if -- and I stress if -- our country takes the necessary steps to secure that outcome."
But he didn't provide any specific policy measures in his speech, disappointing oil traders."Trepidation and realization finally hit crude markets this morning that the reality of a further stimulus announcement today would not be forthcoming, hence the selloff this morning," said Summit Energy analyst Matt Smith. "However, the decision by the Federal Reserve to extend their next official meeting in September by a day to assess the stimulus tools at hand is probably the best the market could have realistically hoped for, hence we are seeing a turnaround in risk assets in general," he explained. OptionsXpress analyst Mike Zarembski says that any more dips in oil prices should be subdued as long as equities are rallying. "Brent continues to strengthen vs. WTI due to the supply issues in Libya, Nigeria and the North Sea," he added, when explaining their robust differentials. On Friday, there were increased hopes that Libyan oil production would be able to resume once security issues were resolved on reports that Libyan oil and gas infrastructure have not been damaged. Gasoline trading had seen profit-taking by traders who predicted that there would be a rally tied to precautionary Northeast refinery shutdowns in response to Hurricane Irene. However, "now that we're three hours from the end of the day, that market is recovering," said Tom Kloza, chief oil analyst at the Oil Price Information. "It may be silly to buy gasoline on the premise of storm damage, but it's not safe to sell gasoline ahead of a Category 3 storm, and that may be the theme this afternoon."