Oil Rises to 31-Month High
Source: Bloomberg (4/28/11)
"Oil and gas futures surge as dollar weakens."
Crude gained as much as 1.1% as the Dollar Index, which tracks the currency against six others, dropped after Federal Reserve Chairman Ben S. Bernanke said yesterday that the central bank will keep record-low interest rates in place and stop buying bonds in June. Gasoline supplies fell to the lowest level since 2009 in a government report yesterday.
"We're seeing the dollar edging lower, and that's providing some support for crude," said Matt Smith, a commodities analyst for Summit Energy Services Inc. in Louisville, Kentucky. "The products, especially gasoline, are also dragging crude higher."
Crude for June delivery gained $1.14, or 1%, to $113.90 a barrel at 11:14 a.m. on the New York Mercantile Exchange. Earlier, oil touched $113.97, the highest price since Sept. 22, 2008.
Oil has risen 6.7% in April and is poised for an eighth consecutive monthly advance, the longest streak since the contract began trading in 1983. Futures have gained 37% in the past year.
Brent futures for June settlement increased $1.35, or 1.1%, to $126.48 a barrel on London's ICE Futures Europe exchange.
The Dollar Index fell to the lowest level since July 31, 2008. The index dropped 0.6% to 73.054, its eighth consecutive daily decline. Weakness in the U.S. dollar boosts the appeal of crude and other commodities as an alternative investment.
U.S. stockpiles of gasoline fell 2.51 million barrels last week to 205.6 million, the Energy Department said yesterday. The 10-week streak of declines was the longest in four years.