Oil Rises On Fed Stimulus Plan
NEW YORK (AP) â¿¿ The price of oil is higher Wednesday after the Federal Reserve made another big move to stimulate the slow-growing U.S. economy.
The Fed said it will spend $45 billion a month to sustain an aggressive drive to keep long-term interest rates low. It also set a goal of keeping a key short-term rate near zero until unemployment drops below 6.5 percent. The central bank has launched three rounds of bond purchases since the financial crisis hit. The latest replaces a similar plan that was about to expire.
Stimulus measures generally weaken the dollar, which tends to direct more investors into buying commodities.
Benchmark crude rose $1.14 to $86.93 a barrel in New York.Before the Fed statement was released Wednesday afternoon, oil was moderately higher but muted by a big increase in the nation's gasoline supply. The government said gasoline supplies jumped twice as much as analysts anticipated last week. That's a sign of weak demand. Prices at the pump fell to $3.31 a gallon, about 4 cents higher than this day a year ago. Brent crude, used to price international varieties of oil, rose $1.44to $108.13 on the ICE Futures exchange in London. Other futures on the New York Mercantile Exchange: â¿¿ Heating oil rose 5 cents to $2.98 a gallon â¿¿ Natural gas fell 4 cents to $3.37 per 1,000 cubic feet. â¿¿ Wholesale gasoline rose 4 cents to $2.65 a gallon.
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