Oil Rise As U.S. Dollar Weakening

SYDNEY: Oil prices rose in New York along with the weakening U.S. dollar triggered by speculation the Federal Reserve would take a loose credit policy to spur economic growth in the U.S..

Crude oil rose as the dollar weakened for a third day amid expectations of a major asset purchases or quantitative easing, known as the QE2. Annual gross domestic product grew 2% in the third quarter.

Crude oil for December delivery rose as much as U.S. $ 0.47, or 0.6% to U.S. $ 81.90 per barrel on the New York Mercantile Exchange, and at the level of the price of U.S. $ 81.77 at 10:46 in Sydney. The contract fell U.S. $ 0.75 or 0.9% to U.S. $ 81.43 on 29 October.

U.S. dollar fell for a third day against the euro to U.S. $ 1.3977 per euro at 10:33 pm in Sydney from U.S. $ 1.3947 in New York on 29 October. The weakening U.S. dollar increases the appeal of commodities as an alternative investment.

Department of Energy reported U.S. crude inventories rose by 5.01 million barrels to 366.2 million barrels last week, the biggest increase since July. Bloomberg News survey shows the price of crude oil is predicted to decline this week along with rising U.S. oil stockpiles.

The central bank will announce a decision about the application of quantitative easing strategy such as the Federal Open Market Committee meeting of 2 to 3 November.

Brent crude for December delivery rose 0.1% to U.S. $ 83.23 per barrel on the ICE Futures based in London. On 29 October, the contract fell U.S. $ 0.44 cents, or 0.5% to U.S. $ 83.15. (T/03yn)

By        : Bloomberg