Oil prices go above $113 per barrel

Oil prices rose above $113 a barrel Thursday in Asia to the highest since 2008 as a weakening U.S. dollar made commodities such as crude cheaper for investors with other currencies.

Benchmark crude for June delivery was up 71 cents at $113.47 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude reached $113.70 earlier in the session, the highest since September 2008.

The contract rose 55 cents to settle at $112.76 on Wednesday.

In London, Brent crude for June delivery was up 54 cents to $125.67 a barrel on the ICE Futures exchange.

Federal Reserve Chairman Ben Bernanke said Wednesday the central bank would complete a second round of Treasury purchases, known as quantitative easing, through June and keep lending rates low.

The euro rose to $1.4860 on Thursday from $1.4773 while the dollar fell to 81.72 yen from 82.26.

Bernanke’s comments “suggested a continued loose monetary policy for an extended period that is apt to maintain pressure on the dollar in the process of boosting equities and assets such as oil,” Ritterbusch and Associates said in a report.

The Fed has kept rates low and pumped cash into the economy in an effort to boost lending and growth coming out of the 2009 recession. But that policy has also helped inflate the prices of dollar-based commodities such as oil, which is up about 50 percent since last summer.

In other Nymex trading in May contracts, heating oil rose 1.5 cents to $3.25 a gallon and gasoline added 2.6 cents to $3.45 a gallon. Natural gas futures were up 0.5 cent at $4.41 per 1,000 cubic feet.
Source: AP