Oil creeps above $75 a barrel

22 September 2010

Written by Bob Burton

Crude oil prices were creeping upwards during electronic trading on the New York Mercantile Exchange this morning (September 22nd), pushing near-term futures above $75 a barrel.

Both crude and heating oil found support as the dollar weakened following the latest policy statement from the US Federal Reserve, with traders now positioning themselves for another potential round of quantitative easing.

Although the Fed kept interest rates on hold, it restated last month's pledge to take further action to stimulate the economy if conditions deteriorate further.

Traders read in to this statement the possibility that the Fed would print additional money, as the Bank of England did in the wake of the financial crisis, and this caused a selloff in the dollar.

In turn, dollar-priced commodities such as crude and heating oil rose this morning as foreign traders sought to take advantage of favourable buying conditions.

Gains were however partially held back by the latest US fuel inventory report showing unexpected weakness in demand last week.

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