Oil rises as Yellen indicates stimulus will stay pending recovery

KUALA LUMPUR, Malaysia – The price of oil rose above US$94 a barrel Friday after incoming Federal Reserve chief Janet Yellen indicated that economic stimulus will remain in place pending further improvement in the U.S. economy.

Benchmark U.S. crude for December delivery was up 35 cents to $94.11 a barrel at midafternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract slipped 12 cents to close at $93.76 on Thursday.

Brent crude, the international benchmark, was up 13 cents to $108.41 a barrel on the ICE exchange in London.

Yellen, who is slated to replace Ben Bernanke in late January, testified Thursday to the Senate Banking Committee. She said the U.S. economy has gained ground but still needs the Fed’s support because unemployment remains too high at 7.3 per cent. The Fed is buying $85 billion of government bonds and mortgage securities a month to keep interest rates low.

The 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 8th straight week, by 2.6 million barrels.

In other energy futures trading on Nymex:

— Wholesale gasoline rose 0.3 cent to $2.666 a gallon.

— Heating oil added 0.5 cent to $2.928 a gallon.

— Natural gas was up 0.3 cent to $3.602 per 1,000 cubic feet.