Oil hovers around $94 a barrel as Fed stimulus balances supply concerns

NEW YORK, N.Y. – The price of oil circled $94 for a second week as the promise of the continuation of the Federal Reserve’s economic stimulus was balanced by abundant U.S. supplies.

Benchmark West Texas Intermediate crude rose eight cents to close at US$93.84 a barrel on the New York Mercantile Exchange on Friday, a day after incoming Federal Reserve chief Janet Yell en indicated that economic stimulus will remain in place pending further improvement in the U.S. economy. The Fed’s low interest rate policy has supported investment in riskier assets such as oil and stocks.

Yellen’s remarks helped offset further signs of oversupply. Data from the Energy Department showed the U.S. produced more crude oil than it imported in October for the first time since 1995. It also showed crude oil supplies rising for an eighth straight week, by 2.6 million barrels.

Oil has traded between US$93 and US$96 a barrel over the past two weeks, and is down 77 cents since Nov. 1.

Brent crude, the international benchmark, gained 22 cents to US$108.50 a barrel on the ICE exchange in London.

In other energy futures trading on Nymex, wholesale gasoline fell three cents to US$2.66 a U.S. gallon (3.79 litres), heating oil gained one cent to US$2.94 a gallon and natural gas rose six cents to US$3.66 per 1,000 cubic feet.