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Oil prices climb as Fed shows confidence in US economy

Published on Mar 20, 2014 12:49 PM

SINGAPORE (Reuters) - Brent crude rose above US$106 a barrel on Thursday after the United States Federal Reserve signalled interest rates could rise next year, indicating strength in the world's largest economy and top oil consumer, while geopolitical tensions also underpinned prices.

In comments that sent stocks and bonds tumbling, Fed Chair Janet Yellen on Wednesday said the bank will probably end its massive bond-buying program this fall, and could start raising interest rates around six months later.

While scaling back of the central bank's commodity-friendly stimulus has been viewed as a drain of liquidity, the latest outlook is being seen by market participants as underscoring confidence in the US economy.

"The consensus is now that the winding down of easy money is happening because the economy is strong enough to stand on its own two feet," said Mark Keenan, head of commodities research in Asia at Societe Generale.

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