Reply #3: Oil rises as dollar drops after Fed interest rate cut (Econ101 lesson review in ten words) [View All]

[ozymandius]

SINGAPORE - Oil prices rose in Asian trading Thursday as the dollar weakened after the U.S. central bank cut its key interest rate.

The U.S. Federal Reserve said Wednesday it would cut the federal funds rate by a quarter percentage point to 2 percent. Early in Asia, the dollar lost ground against both the euro and yen, although it began to stabilize and strengthen later in the day.

"The U.S. (Federal Open Market Committee) meeting and the softer U.S. dollar helped the oil price recover some ground," said David Moore, commodity strategist with the Commonwealth Bank of Australia in Sydney.

Light, sweet crude for June delivery added 79 cents to $114.25 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon Thursday in Singapore.

The contract fell $2.17 Wednesday to settle at $113.46 a barrel after the U.S. government reported that crude inventories rose more than expected last week.

.....

In its weekly inventory report, the Energy Department's Energy Information Administration said crude oil inventories rose 3.8 million barrels, more than double the increase analysts surveyed by energy research firm Platts had expected.

http://news.yahoo.com/s/ap/oil_prices