Oil posts second monthly rise, tops $114 after Bernanke

Fri Aug 31, 2012 4:32pm EDT
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By David Sheppard

NEW YORK (Reuters) - Oil rose above $114 a barrel in volatile trading on Friday, taking gains in August above 9 percent, after U.S. Federal Reserve Chairman Ben Bernanke stopped short of signaling extra monetary easing was imminent but kept the door open for action.

Crude initially pulled back after Bernanke's address at a central bankers' symposium in Jackson Hole, Wyoming. As traders parsed the details, prices were quick to move higher, supported by stronger-than-expected U.S. economic data.

Figures released on Friday showed U.S. factory orders posted the biggest rise in 12 months in July, jumping 2.8 percent, while the Thomson Reuters/University of Michigan survey of consumer sentiment showed the index rising to 74.3 in August from 73.6 in a preliminary August report.

"There was no announcement about if more stimulus was coming immediately, but he (Bernanke) said the Fed was ready to act if necessary so that was supportive," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

"Along with the factory orders and consumer sentiment data, the (market) longs are in control."

Brent crude settled up $1.92 at $114.57 a barrel, having earlier reached a session peak of $114.78. Brent gained 9.2 percent in August, the biggest monthly percentage rise since prices jumped by 10.5 percent in February, and added to a 7 percent rally in July.

U.S. crude rose $1.85 to settle at $96.47, having earlier risen briefly above the 200-day moving average at $96.68, a key technical resistance level closely watched by traders. U.S. crude gained 9.6 percent in August, the biggest percentage gain since October 2011.

September U.S. heating oil, the benchmark distillate futures contract, expired at $3.1696 a gallon, up 4.51 cents on the day and up 11.5 percent in August, biggest monthly percentage gain since September 2010.   Continued...