Wednesday, September 19, 2012

Oil Advances From Two-Week Low After Japan Expands Stimulus Plan

Oil rebounded from the lowest close in more than two weeks in New York amid speculation that Japan’s expanded program of monetary easing may bolster fuel demand in the world’s third-biggest crude user.
Futures advanced as much as 0.9 percent after the Bank of Japan (8301) said it will increase its asset-purchase fund to 55 trillion yen ($697 billion) from 45 trillion yen. The BOJ joins the Federal Reserve and the European Central Bank in taking steps to stimulate the economy. New-home construction in the U.S. probably rose in August to the highest level in almost four years, showing residential real estate is recovering.
“The BOJ has followed the Fed with another bout of stimulus, increasing its asset-buying program, giving commodities a lift,” said Robert Montefusco, a senior broker at Sucden Financial Ltd. in London.
Oil for October delivery gained as much as 88 cents to $96.17 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.98 at 9:07 a.m. London time. The contract slid $1.33 yesterday to $95.29, the lowest close since Aug. 30, and has dropped 4.4 percent since this month’s intraday high of $100.42 on Sept. 14. The October contract expires tomorrow. The more-active November future was at $96.37 a barrel, up 75 cents.
Brent oil for November settlement climbed 86 cents to $112.89 a barrel on the London-based ICE Futures Europe exchange. The front-month European benchmark grade’s premium to the corresponding West Texas Intermediate contract was at $16.50, up from $16.41 yesterday.

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