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Crude inches up on fresh talk of U.S. monetary stimulus

Published 06/12/2012, 07:31 PM
Updated 06/12/2012, 07:32 PM
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Investing.com - Crude oil futures rose in Asian trading on Wednesday after a Federal Reserve official said he would favor stimulating the economy via easing measures.

Saudi Arabian Oil Minister Ali Naimi, meanwhile, said he would not ask OPEC nations to hike production, which further sent oil rising.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at USD83.34 a barrel on Monday, up 0.03%, off from a session high of USD83.53 and up from an earlier session low of USD83.28.

The Federal Reserve will meet next week to address monetary policy and weak jobs reports and sluggish first-quarter growth rates have sparked talk the Fed will jolt the economy via quantitative easing, or large-scale bond purchases from banks designed to keep interest rates low.

Federal Reserve Bank of Chicago President Charles Evans said earlier he would support policy tools that encourage more job growth, including quantitative easing, if needed.

The news pushed up oil on sentiment the Federal Reserve will do what it can to keep the U.S. economy moving, which was bullish for oil.

Quantitative easing works by pumping liquidity into the financial system, some of which finds its way into commodities markets and pushes up crude as well.

Meanwhile, OPEC ministers are set to convene to discuss output levels and Saudi Arabian Oil Minister Ali Naimi said he would not call for higher production ceilings.

Saudi Arabia has ramped up production in the past to ensure global oil supply in case tensions between the West and Iran escalate and threaten supply.

Meanwhile, uncertainty over Europe's fate tempered oil's gains.

On the ICE Futures Exchange, Brent oil futures for July delivery were up 0.03% and trading at USD97.16 a barrel, up USD13.82 from its U.S. counterpart.








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