• 3 minutes Shale Oil Fiasco
  • 7 minutes "Leaked" request by some Democrats that they were asking Nancy to coordinate censure instead of impeachment.
  • 12 minutes Trump's China Strategy: Death By a Thousand Paper Cuts
  • 16 minutes Global Debt Worries. How Will This End?
  • 5 mins DUMB IT DOWN-IMPEACHMENT
  • 5 mins Greta named Time Magazine "Person of the Year"
  • 5 hours POTUS Trump signs the HK Bill
  • 1 hour Everything you think you know about economics is WRONG!
  • 5 hours americavchina.com
  • 6 hours Forget The Hype, Aramco Shares May be Valued At Zero Next Year
  • 1 day WTO is effectively neutered. Trump *already* won the trade war against China and WTO is helpless to intervene
  • 1 day Democrats through impeachment process helped Trump go out of China deal conundrum. Now Trump can safely postpone deal till after November 2020 elections
  • 6 hours Winter Storms Hitting Continental US
  • 6 hours Aramco Raises $25.6B in World's Biggest IPO
  • 16 hours Can Renewable Natural Gas Compete With Diesel?
Alt Text

Why Oil Prices Just Jumped

Oil prices recovered somewhat on…

Alt Text

Goldman Sachs Sees Higher Oil Prices In 2020

Deeper OPEC output cuts will…

Darrell Delamaide

Darrell Delamaide

Darrell Delamaide is a writer, editor and journalist with more than 30 years' experience. He is the author of three books and has written for…

More Info

Premium Content

Bernanke Pledge on Economy Gives Some Relief to Oil Prices

Oil Market Summary for 08/23/2010 to 08/27/2010.

Oil prices recovered some lost ground Friday after Federal Reserve chairman Ben Bernanke said the Fed stands ready to do whatever it takes to support economic recovery.

The benchmark West Texas Intermediate October futures contract gained 2.5% on Friday, settling at $75.17 a barrel and wiping out losses from the beginning of the week. The expiring September contract closed at $73.46 a week ago.

In a widely anticipated speech Friday morning, Bernanke stopped short of announcing new measures to inject money into the economy but made it clear that the central bank was monitoring the situation closely and would act if necessary to prevent a deflationary spiral.

“The Federal Open Market Committee will strongly resist deviations from price stability in the downward direction,” the Fed chief said in a speech at the annual central bank gathering in Jackson Hole, Wyo.

Bernanke’s remarks came just after the Commerce Department revised estimates of GDP growth in the second quarter downwards, to an annual rate of 1.6% from its initial estimate of 2.4%. Bernanke’s comments at first sent markets down further because he was not specific about when or what the Fed would do. But stock and commodity prices began to rise once participants accepted that the takeaway from Bernanke’s speech was that the Fed stands ready to act.

In the 2008-09 financial crisis, the Fed doubled the size of its balance sheet, injecting liquidity into the economy as it bought mortgage-backed securities. Earlier this month, as data showed the economy slowing down, the Fed said it would maintain its balance sheet at the current high level by reinvesting in long-dated Treasuries when the other securities matured.

Economic news dominated markets during the week. Housing data showed sales both of existing homes and new homes registering significant drops, indicating a further drag on an increasingly sluggish economy.

Analysts cautioned that fundamentals for oil prices are still not good even with the promise of some monetary stimulus for the economy if needed. Inventories remain at record highs and will continue to weigh on prices, they said.

The U.S. Energy Information Administration reported on Wednesday that crude oil inventories had risen a further 4.1 million barrels, much more than the 1.1 million-barrel consensus forecast.

By. Darrell Delamaide for OilPrice.com




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play