Crude Oil Slightly Gains on Bernanke’s Speech

Crude oil futures gained on Monday after the US Federal Reserve’s Chairman Ben Bernanke indicated possible chances of more easing in US monetary policy. On Monday, Bernanke expressed his opinion of fewer chances in sustainability in labor market improvements in the long run. Investors and most analysts interpreted further easing in monetary policy from Bernanke comments.

Analyst Matt Smith from Summit Energy in Kentucky commented, Bernanke “has gone on record saying it will maintain an accommodative policy, which essentially means low interest rates, which promotes fund flows into commodities … for capital appreciation.”

Weaker dollar and higher stocks also helped in appreciation of crude oil futures. The dollar index DXY which tracks the greenback’s performance fell to 79.119 on Monday as compared to 79.344 on late Friday. Investors were also looking crude oil very cautiously as analyst Carl Larry from Oil Outlooks and Opinions indicated a rising trend in oil.

Crude oil futures contract for May delivery gained 0.2 percent or $0.16 to settle at $107.03 per barrel on the New York Mercantile Exchange. Oil has gained 8.3 percent in the current year so far triggered mainly by tensions in Iran. It is expected that oil exports from Iran will be decreased by 300,000 barrels per day in March.

Among other energy commodities, gasoline futures for April delivery gained 0.9 percent or $0.03 to settle at $3.42 per gallon while heating oil for futures for the same month delivery climbed 0.6 percent or $3.23 per gallon.

However, natural gas futures fell as winter demand is diminishing, natural gas for April delivery declined 2.2 percent or $0.05 to settle at $2.33 per million British thermal units.

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