Oil trades near two-year high
Oil traded near its highest level in two years in New York as the dollar headed for a weekly decline against most major counterparts after the Federal Reserve’s decision to purchase more debt to boost the US economy.
Crude is headed for a 6.2pc gain this week, during which the dollar depreciated versus all but one of its 16 most- traded peers.
The Fed said November 3 it will buy about $75bn of Treasuries every month through June.
Oil gained even as a US government report November 3 showed stockpiles rose last week to the highest level since May 2009.
“Underlying demand in the industrialised world is still not enough to justify these price levels,” said Eugen Weinberg, head of commodity research at Commerzbank AG.
“But market sentiment is so strong that if the weakness of the dollar persists I couldn’t rule out higher prices.”
Oil for December delivery traded at $86.47 a barrel, down 2 cents, in electronic trading on the New York Mercantile Exchange at 9:30am.
The contract earlier rose to $87.22, the highest price since October 9, 2008. Brent crude for December settlement slipped 18 cents to $87.82 after rising to $88.80 a barrel on the ICE Futures Europe exchange in London.