Oil prices rallied this evening on news that the US Federal Reserve would keep interest rates low for more than two years to boost growth in the world's biggest economy.
US crude jumped $1.19 to $100.59 a barrel. Brent North Sea crude rose $1.05 to $110.86 in London.
Analysts said the Fed move would boost oil prices by supporting US economic growth and by putting pressure on the dollar. A weaker US currency makes dollar-denominated crude cheaper for buyers holding other currencies, thereby boosting demand.
The Fed news overshadowed worries over a potential Greek debt default and earlier US government data showing weaker energy demand.
Oil traders were also following the latest news on Iran after the EU this week imposed a ban on the country's oil imports and of assets owned by its central bank.
Iran's President Mahmoud Ahmadinejad today insisted that his country would not be hurt by newly imposed Western sanctions.
The embargo, aimed at dissuading Iran from building a nuclear weapon, could see the major oil exporter react by closing the strategic Strait of Hormuz. The narrow waterway that links the oil-rich Gulf with the Arabian Sea and beyond is crucial to the global economy, as about 40% of global oil exports pass through it.
Any blockade of the Hormuz strait would send oil prices soaring by more than $30 a barrel, the IMF estimated in a report released Wednesday.
