Oil prices surged to a fresh-six month high this evening as the US Federal Reserve's new stimulus plan to aid the flagging US economy spurred investors risk appetite.'
The dollar slumped against other major currencies a day after the Fed decision to buy $600 billion in US Treasury bonds, as investors sought better returns elsewhere.
A weak dollar lifts oil and other dollar-denominated commodities as it lowers the value of the currency paid to oil producers and it attracts investments seeking higher gains than those found in other markets.
US crude shot up to an early high of $86.68 a barrel, the highest since May 3. This evening it was up $1.65 to $86.34. Brent rose 1.8% to $87.93.
Top oil exporter Saudi Arabia earlier this week shifted its price range up to $70-$90 but today a senior Gulf source said between $70-$80 was still a fair price.
Meanwhile, OPEC secretary general Abdullah al-Badri said oil at $90 would not hold back growth in the world economy. The comments added to indications this week that the Organisation of the Petroleum Exporting Countries was unlikely to step in to quell rising prices.
