Commodities: Oil steers back up to $80 a barrel

Date: Thursday 25 Feb 2010

The weaker dollar gave oil a lift on Wednesday with crude oil driving back up to $80 a barrel.

Comments from Fed chairman Ben Bernanke that interest rates should remain ultra low for some time boosted demand for oil and outweighed the government’s weekly stockpile report, which showed an increase in crude stockpiles. He added that the economic recovery is not yet sustainable.

Crude for April delivery rose $1.14 to settle at $80 a barrel on the New York Mercantile Exchange.

In his address to Congress Bernanke said near-zero interest rates are still needed and that he is worried about the state of the job market.

The Energy Information Administration said crude oil stockpiles rose 3m in the week ended 19 February, much higher than expectations of a 1.9m gain. Gasoline inventories fell about 900,000 barrels, confounding expectations of a 500,000 barrel rise.

Meanwhile distillates, used in heating oil, fell by 600,000 barrels, less than forecasts for a 1.2m decline.

Gold was off the menu for the third consecutive session after Bernanke’s comments on the US economy. Gold for April delivery fell $6 to settle at $1,097.20 per ounce in New York.

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