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Crude oil jumps after Fed stimulus announcement

Published 09/14/2012, 03:00 AM
Updated 09/14/2012, 03:01 AM
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Investing.com - Crude oil futures jumped on Friday, amid speculation that the Federal Reserve's decision to add stimulus measures will boost fuel demand, while supply concerns linked to the current turmoil in the Middle East also supported prices.

On the New York Mercantile Exchange, light sweet crude futures for delivery in October traded at USD99.54 a barrel during European morning trade, climbing 1.27%.

The Fed announced on Thursday that it would buy USD40 billion of mortgage-backed securities every month and would keep buying them until the job market improves.

"We want to see lower unemployment. We want to see a stronger economy that can cause the improvement to be sustained," Fed Chairman Ben Bernanke said following the central bank's two-day policy meeting.

The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.

Meanwhile, oil prices also advanced following news on Thursday that demonstrators in the Yemeni capital, Sana’a, breached the U.S. embassy compound’s security perimeter and set two cars on fire. One protester was killed and five injured, according to Al Arabiya television.

In addition, at least 216 people in Egypt were injured in a third day of clashes near the U.S. embassy in Cairo. There were also demonstrations outside the Swiss mission in Tehran, which represents U.S. interests in Iran.

The violence in the Middle East and North Africa, which hold more than half of the world’s oil reserves, was prompted by extracts of a film that portrays Muhammad. The unrest also follows the killing of the U.S. ambassador to Libya, Chris Stevens, and three officials during an attack on consular buildings in Benghazi on September 11.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery rose 0.71% to trade at USD116.72 a barrel, with the spread between the Brent and crude contracts standing at USD17.18 a barrel.


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