Brent crude oil got support from a weaker dollar and managed to climbed over USD124 a barrel on Wednesday, based on expectations that the Federal Reserve will confirm after its monetary policy meeting on Wednesday that it will maintain its loose monetary policy .
The US Dollar slid to a three-year low today which boosted the USD-denominated oil prices that has attracted investment as a hedge against inflation.
Brent crude with June expiry rose 31 cents to $124.45 a barrel by 0910 GMT. On Tuesday, it gained 48 cents to settle at $124.14 a barrel, having rebounded from a $122.78 low. Meanwhile U.S. crude oil was up in European trading to hit a day high of USD112.77, up from the open level of USD 112.29.
ANZ analyst, Serene Lim commented that “Investors are being very cautious ahead of the Fed meeting and prices are drawing support from a weak dollar.” She added, “Oil will continue to trade in this range till the outcome of the Fed meeting is known at least.”
Continuing political unrest in Libya and the Middle East has resulted largely in a shutdown of Libya’s oil exports and has had a spillover effect to Syria and Yemen, helping put a floor under the market.