Oil price goes up on Fed stimulus

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Oil price goes up on Fed stimulus

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The Brent contract had hit four-month highs on Friday after the Fed announcement.

17 September,2012 10:19 am

Oil prices rose in Asia Monday as dealers welcomed the US Federal Reserves plan to kickstart the economy, while tensions in the Middle East also provided support, analysts said.New Yorks main contract, light sweet crude for delivery in October gained 10 cents to $99.10 a barrel in the afternoon and Brent North Sea crude for November added 26 cents to $116.92.IG markets said in a report that crude prices were still basking in the glow of the Feds announcement Thursday that it would start a third round of bond buying to stimulate the economy, known as quantitative easing (QE3).The big question is how long this Fed-inspired rally will continue as QE3 was the last bazooka to be used in the central banks arsenal, the report stated.For the time being, it has given a powerful shot in the arm for global markets. Anti-US demonstrations have been sparked across the oil-rich Middle East and other Muslim nations against a film deemed insulting to the Prophet Mohammed, spurring prices on fears over supplies of the black gold.Rising Middle Eastern tensions could support oil prices at these levels, the IG Market report said.