Oil prices rise, dollar declines as Fed sticks to stimulus
NEW YORK - Crude oil futures on both sides of the Atlantic extended intraday gains on Wednesday after the U.S. central bank said it would leave its monetary stimulus program unchanged.
The U.S. Federal Reserve said it would continue to purchase US$85 billion in bonds per month fearing it could slow economic recovery if it let up on its fiscal stimulus.
"The FOMC's decision not to taper reflects the recent slowing in the economy, the lackluster employment gains, and the concerns over deflation," said John Kilduff, partner at Again Capital in New York. "Monetary support for assets, especially dollar denominated commodities will continue."
Oil prices had rallied earlier in the day after data showed U.S. crude oil inventories fell to their lowest level since March 2012. Supplies at the Cushing, Oklahoma, storage hub fell to their lowest level in 19 months as U.S. oil's discount to global benchmark Brent narrowed to its smallest point in a month, Reuters reported.