UPDATE 3-Brent crude rises above $117 on Fed stimulus
* Brent higher for seventh straight session
* Brent set to close the week up more than 2 percent
* Geopolitical risk, weaker dollar provide support (Updates prices, previous SINGAPORE)
LONDON, Sept 14 (Reuters) - Brent crude rose for the seventh straight session on Friday, climbing above $117 a barrel on hopes for stronger global demand for oil after the U.S. Federal Reserve launched an aggressive programme to stimulate the economy.
Brent climbed to a four-month peak of $117.72 a barrel in earlier trade and by 0900 GMT was up $1.53 at $117.41. The global North Sea benchmark is on track to end the week up more than 2 percent.
U.S. crude rose $1.46 to $99.77 a barrel after briefly hitting a four-month high of $99.64. It is set to close the week up 3 percent.
"The Fed is looking to purchase $40 billion worth of mortgage-backed securities per month for an open ended period, so that suggests there is going to be ongoing stimulus into the economy for an indefinite time," said Natalie Rampono, a commodity strategist at ANZ.
"That is the key reason oil prices hit a four-month high."
The Fed's decision to tie its third bond-buying programme directly to economic conditions was an unprecedented step that marked a big escalation in its efforts to drive down U.S. unemployment.
The U.S. dollar on Friday fell to a four-month low against the euro due to the Fed action. Losses in the dollar can support dollar-denominated commodities such as oil by making them cheaper to consumers using other currencies.
Oil was also boosted by escalating anti-U.S. protests over a film demonstrators consider blasphemous to Islam.
Protesters attacked the U.S. embassies in Yemen and Egypt on Thursday, while the United States sent warships towards Libya, where the U.S. ambassador was killed in related violence this week. Demonstrations have also taken place in Kuwait, Iran, Bangladesh, Tunisia, Morocco and Sudan.
"The Middle East premium is starting to be thrown into the oil price a little bit, adding about $5 to the price," said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm.
"A lot of the dissident parties will use the film as a means to promote more unrest. As a result of that, I see it continuing for a while."
Central bank action, geopolitical risks and a weaker dollar have offset pressure from rising U.S. crude stockpiles.
Crude inventories in the world's largest economy rose an unexpected 1.99 million barrels last week, the Energy Information Administration said on Wednesday. Analysts polled by Reuters had forecast a draw of 2.6 million barrels. (Reporting by Peg Mackey; additional reporting by Randy Fabi in Singapore; editing by James Jukwey)
- Tweet this
- Share this
- Digg this
- Pro-independence Scots narrow gap to victory ahead of vote - poll
- UK's fate in the balance as poll shows record support for Scottish independence
- Child abuse revelations divide "most shameful town in Britain"
- Kremlin adviser says military strategy to reflect Ukraine crisis, NATO expansion - RIA
- Russian forces strengthening positions in Ukraine - Kiev military