October 12, 2010 by staff
By early afternoon in Europe, benchmark crude for November delivery was up 13 cents at 82.79 and a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 99 cents to $ 82.66 and Friday.
Investors anticipate that September report weak U.S. employment will push the Federal Reserve at a meeting next month to buy Treasury bonds and other measures of quantitative easing known to lower interest rates and encourage long-term loans.
Driving interest rates lower encourage investors to put money in assets like stocks and commodities. However, the policy would also put more money into circulation, causing the currency to decline.
A weaker dollar generally rises by crude prices cheaper for investors holding other currencies.
“The certainty of more quantitative easing by the Fed also has weakened the U.S. dollar, provided support to financial markets and caused commodity prices to rise again,” Commerzbank said in a report.
Private employers added 64,000 workers last month, short of 75,000 economists expected, the government said Friday. Overall, 95,000 jobs were cut as governments temporary workers laid off, and the unemployment rate stood at 9.6 percent.
“Once investors have begun to see the employment data in terms of quantitative easing, rather than as a sign that the economy has really run out of all of its forward thrust, the oil price spike”, Cameron Hanover said in a statement. “The economy is so anemic, investors took heart that the Fed will help.”
In Nymex trading in contracts for November, heating oil rose 0.63 cent to 2.2882 a gallon of gasoline and 1.24 cents for granted and 2.1636 a gallon. Natural gas fell 4.6 cents to 3.605 per 1,000 cubic feet.
In London, Brent crude added 10 cents to 84.13 a barrel on the ICE Futures exchange.
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