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.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

More from Opinion

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Time to Talk Tesla: What Happened This Week, Elon?

Time to Talk Tesla: What Happened This Week, Elon?

Apple Needs to Figure Out Its Self-Driving Vehicle Strategy

Apple Needs to Figure Out Its Self-Driving Vehicle Strategy

Throwback Thursday: Tesla, Chip Stocks, TheStreet's Picks

Throwback Thursday: Tesla, Chip Stocks, TheStreet's Picks