Oil surges after Bernanke speech

September 01, 2012 | 08:22

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Crude oil prices surged Friday, lifted by a weaker dollar on remarks by US Federal Reserve chief Ben Bernanke and by a slow return of Gulf of Mexico production after Hurricane Isaac.

Crude oil prices surged Friday, lifted by a weaker dollar on remarks by US Federal Reserve chief Ben Bernanke and by a slow return of Gulf of Mexico production after Hurricane Isaac. (AFP Photo/Patrick Kovarik)

New York's main contract, light sweet crude for October, was up $1.85 at $96.47 a barrel in closing trade around 2000 GMT ahead of a long holiday weekend.

In London, Brent North Sea crude for delivery in October closed at $114.57 a barrel, up $1.92 from Thursday's close.

"Oil flew higher as Ben Bernanke kept open the window for further Fed stimulus," said David Morrison at GFT.

In his highly anticipated speech, Bernanke defended the Fed's interventions of the past four years and signaled he would be pushing for more when the Fed's policy board meets in 12 days.

"The economic situation is obviously far from satisfactory," he said in the keynote speech of the Fed's annual conference of central bankers in Jackson Hole, Wyoming.

The Fed chairman said the central bank would provide additional policy accommodation "as needed" for economic growth in the world's biggest oil-consuming country.

The dollar weakened, helping to boost demand for dollar-priced crude oil.

James Williams at WTRG Economics noted that prices may have found support from the return of production in the Gulf of Mexico "which is proceeding slower than after previous hurricanes."

Williams said that of the 509 production platforms that were evacuated, only 10 were back up or had staff moved back to them.

"Out of 1.3 millions barrels of oil shut in, only 3,000 barrels have returned to production," he said.

All US markets are closed Monday for Labor Day.

AFP

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