Oil prices edged higher on Monday as bearish comments from Federal Reserve Chairman Ben Bernanke were viewed as increasing the chance of further growth-boosting quantitative easing, pushing the dollar lower.
The U.S. economy would need to grow more rapidly whether it is to produce enough jobs to lower your the unemployment rate, Bernanke said, which analysts said had firmed a notion that the Federal Reserve may print additional money to compliment the economy.
“It’s popped on expectations of more quantitative easing, that’s seen the dollar weakening,” said Michael Hewson, analyst at CMC Markets.
Brent crude futures were up 58 cents to $125.71 a barrel at 1522 GMT. U.S. crude futures were up 32 cents at $107.19.
The dollar index .DXY was down 0.3 percent, making purchases of oil, which can be priced while using U.S. currency cheaper in other currencies.
Supply disruptions from Iran, Syria, South Sudan and Yemen have supported oil prices in 2010, with Brent up 16 percent.
On Friday, crude rose by almost $2 per barrel as details emerged in the first sizeable drop by Iranian exports as some buyers stopped or scaled back purchases to prevent Western sanctions aimed towards its disputed nuclear program.
A surprise improvement in German business sentiment for that fifth month consecutively in March also supported prices, but gains were held in check by worries regarding the euro zone.
Spain could possibly be the next focus of contagion inside the common currency area, as bond investors switch into Italian debt ahead of a conference of euro financial ministers by the end from the month to consider if you should increase a bailout fund.
“Costs are in the range moving between worries about demand destruction and tensions with Iran,” Petromatrix’s Olivier Jakob said on Monday, adding it will be hard to get out of the product range.
About the supply front, crude exports from Iran appear to have fallen this month by around 300,000 barrels every day (bpd), or 14 percent, in accordance with estimates from industry consultant Petrologistics and an oil company.
The possibilities of a prompter-than-expected resolution to the standoff that shut out production from South Sudan also included in pressure about the downside.
South Sudan said on Saturday it hoped to solve a dispute over oil along with other outstanding difficulties with Sudan with a month or two.
A restart at South Sudan’s oilfields provides output on the two countries time for about 350,000 bpd, up from about 50,000 bpd currently.