Oil prices rallied in Asia today as traders celebrated a fresh round of quantitative easing announced by the US Federal Reserve, analysts said.
New York’s main contract, light sweet crude for delivery in October surged 65 cents to $98.96 a barrel and Brent North Sea crude for November delivery added 56 cents to $116.44.
Brent crude for delivery in October had late yesterday soared to a four-month high of $116.90 before closing.
Crude oil markets rose after traders’ hopes for stimulus announcements at the end of a two-day Fed meeting yesterday were met, IG Markets said in a report.
“Never fear, QE3 is here. At long last the markets got what they wanted as (Fed chief Ben) Bernanke finally announced another ambitious bond—buying programme he hopes will lead to a sustainable recovery in the US economy,” the report stated.
“The icing on the cake announced last night was that no defined time limit was announced for QE3.”
The Fed late yesterday announced a new, open-ended $40 billion per month bond-buying programme which would remain in place until there was substantial improvement in the jobs market where 8.1 per cent of Americans remain unemployed.
“QE3” — the Fed’s third “quantitative easing” programme in less than three years — would take the central bank’s total monthly purchases, including ongoing programs, to $85 billion a month, it said.
In addition, the Fed also pledged to keep its benchmark interest rate at ultra-low levels until at least mid-2015.