Oil up on Bernanke leaving stimulus door open

Tue Jul 17, 2012 5:31pm EDT
 
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By Robert Gibbons

NEW YORK (Reuters) - Oil prices rose a fifth straight session on Tuesday, after U.S. Federal Reserve Chairman Ben Bernanke left the door open for more monetary stimulus but gave no signal on whether the Fed was closer to such a move.

Investors had hoped for signs that the Fed was nearing a third round of bond purchases, also known as quantitative easing or QE3, to boost a wavering economy.

After the first of two days of congressional testimony by Bernanke sent oil prices lower, both Brent and U.S. crude bounced back, with prices supported by tensions involving Iran's dispute with the West over Tehran's nuclear program, along with recent North Sea supply interruptions.

Bernanke repeated the Fed's pledge to act if needed, even while offering no new clues on when or how the central bank might offer extra support to the U.S. economy.

"It's post-Bernanke buying because, while he was not explicit about doing something, the door is clearly open," said John Kilduff, partner at Again Capital LLC in New York.

The euro recovered from losses against the dollar and U.S. stocks ended higher after both fell back when Bernanke's testimony before a Senate committee quelled hopes for quick Fed action after recent moves by central banks in China and Europe to bolster a sputtering global economy. .N <USD/>

Brent September crude rose 63 cents to settle at $104 a barrel, swinging from $102.77 to $104.75.

U.S. August crude pushed up 79 cents to settle at$89.22 a barrel, having fallen to $87.41 before reaching the $89.46 intraday peak after the initial Bernanke-induced slump.   Continued...

 
An employee holds a gas pump at a gas station of Hyundai Oilbank in Seoul June 15, 2012. REUTERS/Choi Dae-woong