Crude Oil Extends Gains Amid Believes Fed May Keep Stimulus

Crude oil rose for the fifth day and is heading for the first monthly advance this quarter amid believes the US Federal Reserve will keep its bond-buying program that supports growth in the world’s largest oil consumer.

Several speeches from Federal Reserve policymakers on Thursday suggested that the central bank will not reduce stimulus until economic growth and the labor market improves, boosting the outlook for oil demand and improving sentiment.

Yesterday’s data also improved the demand outlook in the world’s largest oil consumer after fewer Americans filed for unemployment benefits last week while consumer spending rebounded in May following the biggest drop in more than three years in April.

- Crude is trading around $ 97.51 a barrel after rising $0.46

- Brent is trading around $ 103.15 a barrel after rising $0.33

Also giving support to prices are worries from a possible supply disruption from the Middle East as Syria’s war continues to threaten neighboring countries while in Libya the defense minister will be removed from his post after fierce clashes between militias in Tripoli.

Markets will focus today on Germany’s CPI, Canada’s GDP and the US’s consumer confidence, but as the oil market might witness some profit-taking and short-covering ahead of the weekend, prices might move within a narrow range Friday.

Prices may decline next week on speculation US fuel inventories are high despite the start of the summer driving season, yet attention will turn to China’s factory activity numbers on Monday and the US nonfarm payrolls on Friday for signs on the outlook for demand.

- Natural gas is trading at $ 3.602 per cubic feet after rising 0.56%

- Gasoline is trading at $ 2.7432 a gallon after rising 0.02%

- Heating oil is trading at $ 2.8973 a gallon after rising 0.27%