Oil Prices Hit $88pb After Rally

Crude oil futures hit two year highs last Friday, still riding the wave of optimism created by the United States Federal Reserve’s announcement of a fresh round of stimulus.

US light, sweet crude for December delivery improved to $86.61 per barrel, while January crude reached $87.28 per barrel on the New York Mercantile Exchange (NYMEX).

On the ICE Exchange, December Brent Crude stood at $88.04 per barrel, while Brent Crude for January delivery last traded at $88.21 per barrel on Friday.

The Fed was widely expected to unveil a new round of quantitative easing, though it was not clear what the size of the new asset purchase programme was going to be.

However, The Tide gathered that the consensus forecast may stand at aroundS$500 billion over six months.

Investors shied away from putting money into riskier assets, held back by a report in the Wall Street Journal, which suggested that the Fed may opt for a smaller package, limiting it to a few hundred billion over a few months to minimize policy risks.

But experts, including Ascent Resources recommend that Swiss assets managers, Petrel Resources settles Iraq issues to create the leverage for speedy recovery in the economy.

IGAS is well placed to aid ailing UK gas industry, but on the contrary, the Fed decided to buy $600 billion worth of Treasuries to spur the apparently slowing recovery.

This move triggered a buying spree in commodity markets, while pushing the US dollar to 11 month lows against a basket of other major currencies.

Weakness in the US dollar provided further support for oil prices, making crude oil cheaper for holders of other currencies to lift demand.

The American currency rebounded later in the day on demand from bargain hunters, trimming gains in oil futures.

Meanwhile, the big majors have continued to post a mixed grill of profit and loss accounts after investors geared at the jittery market Indices.

Consequently, British Petroleum posted a small gain, while fellow super-major, Shell declined marginally, just as did BG Group and Cairn Energy, all on the floor of the London Stock Exchange.

On the other hand, Tullow Oil held steady, while Amec climbed 1 per cent on the London trading.

 Another oil and gas engineering firm, Petrofac stood just above the opening level.

Midcaps were mixed. Heritage Oil led the group with a 1.6 per cent gain while Premier Oil and Salamander Energy added less than 1 per cent.