Oil advanced in the Asian trade today on hopes that the US economy will be able to find a way out of its slump without more monetary stimulus, analysts said.
In the morning trade, New York’s main contract — light sweet crude for October delivery — added 22 cents to $87.49 a barrel, and Brent North Sea crude for October delivery gained 29 cents to $112.17.
“It all has to do with confidence and with the fact that people believe the US has the ability (to bounce back),” said Mr Jonathan Barratt, Managing Director with Commodity Broking Services in Sydney.
Last week’s speech by the US Federal Reserve chief, Mr Ben Bernanke, in which he voiced expectations that the economy would grow in the second half of the year after near-stagnant growth in the first six months, was a boost to markets, analysts said.
Mr Bernanke’s speech in Jackson Hole, Wyoming, in which he also made no new announcement of monetary stimulus, was interpreted as a sign of confidence in the world’s largest economy, which is also the biggest oil consumer.
Meanwhile, the impact of Hurricane Irene on oil operations was relatively weak, analysts said.
“Although the US East Coast saw widespread power outages and several refineries and/or terminals shut or cut back operations, Hurricane Irene packed a much smaller punch than feared,” JP Morgan analysts said in a client note.