This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Oil Rises On Fed Policy Decision, US Supply Report

By The Associated Press

NEW YORK (AP) â¿¿ The price of oil spiked Wednesday as the Federal Reserve unexpectedly maintained its stimulus for the U.S. economy and the Energy Department reported a bigger than expected drop in supplies of crude oil and gasoline.

Benchmark oil for October delivery gained $2.65, or 2.5 percent, to close at $108.07 a barrel on the New York Mercantile Exchange. It was oil's biggest gain in three weeks and erased the losses from Monday and Tuesday.

The Fed was widely expected to begin winding down its program of buying $85 billion a month in bonds and other assets. Instead, the central bank said it will maintain the pace of the bond purchases because it thinks the economy still needs the support.

Global stocks and commodities have surged as the new money generated by the unconventional program flowed through the financial system. Stocks rose sharply Wednesday following the Fed's announcement. The Standard & Poor's 500 index and the Dow Jones industrial average jumped to all-time highs.

Oil fell a combined $2.79 a barrel on the first two days of the week due to the prospect of a reduction in stimulus. But on Wednesday, even before the Fed issued its decision, traders appeared less fearful of the impact of so-called tapering, since analysts believed the central bank would keep official interest rates low to keep the U.S. economy chugging along.

In its announcement, the Fed repeated that it plans to keep its key short-term interest rate near zero at least until unemployment falls to 6.5 percent from its current level of 7.3 percent.

Earlier, the Energy Department said supplies of crude oil fell by 4.4 million barrels last week, almost three times more than analysts expected. At 355.6 million barrels, the nation's supply of crude oil is 3.3 percent below year-ago levels. Gasoline supplies dropped by 1.6 million barrels. Analysts expected gasoline supplies to remain unchanged.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,042.90 -28.32 -0.17%
S&P 500 1,972.29 -5.51 -0.28%
NASDAQ 4,493.39 -12.4620 -0.28%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs