Oil approaches $100 in New York on Fed stimulus, Mideast unrest [View all]
Friday, 14 September 2012
By Grant Smith and Ben Sharples
Oil rose to the highest level in four months on speculation that economic stimulus in the U.S. will boost fuel demand, and concern that unrest in the Middle East and North Africa will disrupt supplies.
Futures advanced as much as 1.4 percent, erasing their decline for the year. The Fed said yesterday it will make open- ended purchases of $40 billion a month of mortgage debt to boost the economy. Protesters attempted to storm the U.S. embassy in Yemen and demonstrators marched in Egypt and Iran against a film seen as insulting to Islam. Iran is raising tension by expanding its nuclear program, according to Robert Wood, the U.S. envoy to the International Atomic Energy Agency.
“We always have initial optimism on stimulus programs -- the question is, how long it will last?” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “Middle East geopolitical concerns should add a premium of about $5 to $6.”
Crude for October delivery climbed as much as $1.44 to $99.75 a barrel in electronic trading on the New York Mercantile Exchange. It was at $99.46 at 8:18 a.m. Singapore time. The contract yesterday increased 1.3 percent to $98.31, the highest close since May 4. Prices are up 3.1 percent this week, set for the sixth gain in seven weeks.